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Defy the feds, save your stimulus check

The stimulus package President Bush signed into law is intended to fuel the economy and help avoid a recession by getting Americans to spend more money. However, Americans are already spending too much. According to a new Commerce Department report, the national personal savings rate for 2007 was a mere .5 percent.
Meanwhile, the average American carries thousands of dollars in credit card debt. Despite Washington’s concerns about cutbacks in consumer spending, it is not the responsibility of financially troubled Americans to increase purchases. Many Americans need to take steps to stabilize their finances by depositing their rebate checks in a savings account. This is especially the case in here in the Valley, where wages remain relatively low and the foreclosure rate is one of the highest in the nation.  
Trying to spend our way out of the recession also sends the wrong message to our children. Increasing the national debt and passing those costs on to future generations is not sound financial policy. Spending will not stop a free fall in the credit markets or prevent inflation. Arizonans receiving rebate checks should consider using any new funds to pay down high-cost debt and add to savings. That will help them not only cover unexpected expenses like car repairs and doctor visits, but also protect against any income losses. Over the long term, increased savings in our community is likely to improve the financial condition of our residents and reduce dependency on government assistance. Moreover if the savings rate increased Arizonans might use fewer fringe financial products and be able to save even more effectively. 
Consumers across the nation are encouraged to open savings accounts. Valley residents can contact Arizona Saves and register for a free financial education course. If they sign up to become an “Arizona Saver” they will are able to open a low-minimum ($25) and no-fee savings account at one of 19 local financial institutions.
As the national economy weakens, families should take advantage of Arizona to take steps that strengthen their financial condition. These could include a personal commitment to use rebate checks received this spring to increase savings. 
We need to remind our lawmakers in Washington and consumers across Arizona that our ability to achieve financial stability will not be measured by our capacity for spending but by our commitment to savings. If a recession is truly coming, low- and moderate-income workers will need their savings more than ever.
Useful savings tools can be found on the Arizona Saves Web site (www.arizonasaves.org). These tools include a “savings checklist” and information on how to pay off high-cost debt, reduce spending and build savings for an emergency.
Patrick Jordan is the executive director of Arizona Saves, a nonprofit that began in 2003 with the mission to help Arizonans learn to better manage their money, reduce debt and invest wisely.

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