As Washington tries to move quickly to finalize an economic stimulus package that will give individual Americans rebates of several hundred dollars, Mark Johannessen, President the Financial Planning Association (FPA), issued a warning in late January advising consumer caution when considering uses for the money.

"It’s strangely ironic that Washington is telling Americans to go out and spend to help save our troubled economy," said Johannessen. "American consumers are nearing the $1 trillion mark in debt, for credit cards, mortgages and other types of loans."

Rebate Options
Once Congress reaches an agreement and you actually receive a rebate check--which will likely occur no sooner than May 2008--Johannessen is urging people to carefully consider using the money to pay down their credit card debt or add it to their savings for an emergency fund or retirement.

We strongly agree. Although the politicians want you to spend, spend, spend, the most prudent financial move for most is to establish and begin funding an emergency "rainy" day fund. In the grips of a recession, jobs are lost, incomes decrease, and household financial security often comes into question.

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Lightship Mutual is a proud member of the Financial Planning Association, a national organization dedicated to providing everyone with competent, objective financial advice delivered by competent, objective financial professionals. FPA members demonstrate and support an ongoing commitment to education as well as a client-centered financial planning process.