If you’ve been following the latest on the economic stimulus package (or tax stimulus package), you’ve probably learned that we’re all waiting on the Senate to approve a bill that is similarly worded to the House’s H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008 (great bill name!). Rather than outline the Senate version and assume you’ll be able to tell the difference, let me just explain the differences.

Incidentally, the latest news is that Senate Democrats can’t get the 60 votes necessary to move past debate (a step known as cloture) on the bill they’ve outlined so a vote will likely have to wait until next week – if ever. If things stall, they will accept the House version.

Latest news is that the Senate has passed its version of the bill, explained below!

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Biometrics, loosely defined as the process of using a person’s physical characteristics for identification, is slowly gaining popularity and their use may soon extend to credit cards. Privacy is always a hot button concern in the US, just think back to when AOL released all that search data, and the collection and storage of your physical characters, one of the most personal of things, is something that probably would both a lot of people. So I’m curious, if biometric data were required, would it bother you? If it was optional, would you elect it?

I have mixed feelings on this. I’m not a gung-ho privacy advocate in some aspects and conservative in others. For example, I’m comfortable with people being able to see the websites I surf but I don’t want my information stored somewhere if it’s not absolutely necessary. I can see the value of using biometrics as a means of authentication and so would definitely elect to “activate” any biometric-related security features. It’s easy to fake a signature, it’s much harder to fake a fingerprint or retina scan.

As you probably suspected, one of the places where biometric authentication has become pretty popular is Japan (they get all the cool gadgets and gizmos before we do!). One of the reasons is because in Japan you can generally withdraw from the ATM the equivalent of thousands of dollars each day, so the higher security measures are required. Granted, this is the bank, which knows all your financial information anyway, but it’s an example of how biometrics have been rolled out and accepted.

So, what are your thoughts?

In the discussions on Huckabee’s support of the Fair Tax, the idea of a value added tax (VAT), a type of consumption tax, was raised. Having little experience with it myself, I thought it would be valuable to turn to someone who actually did – Plonkee. As a resident of the UK, Plonkee has more first hand knowledge of the VAT so I asked her to describe it for us. This is not to say that the UK’s version of a VAT is how every VAT is, but seeing as how our cultures are basically siblings, it’s not a bad thing to understand.p

What is VAT?

In the UK, as in almost all of rest of the European Union, we have both an income tax, and a consumption tax – in the form of VAT. Like most taxes over in the UK, they are levied by central government and are used to fund both central and local government functions and services.

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My friend Miller recently started the wonderful journey that is the path to homeownership by submitting his information to LendingTree. Through LendingTree you can help determine what the bank(s) believe what homes are considered “affordable” to someone with your income and assets. While your own perceptions of what is affordable may be more aggressive or more conservative, having that additional data point helps. In talking with Miller, we both were getting confused as to the various terms. I remember getting a preauthorization letter, he’s working towards getting a prequalifying letter – though it sounds like we were providing the same types of documents… so what’s the difference? Were we just talking semantics? Here’s the difference:

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Before you laugh too hard and think this is a throwback to a “my dog ate my homework” joke, it’s not; this actually happened to a friend of mine. My friend had left her various tax forms on her desk, including her W-2s and 1099s, and gone out for the day. When she had returned, her dog had jumped onto the desk, grabbed the forms, and basically chewed them all up. They were absolutely destroyed with no hope of being reconstituted. Yep, she was ready to tell the IRS that her dog ate her W-2s!

Luckily, she had already prepared her taxes using online software like TurboTax or TaxCut so she still had all her information, she was just missing the forms. As it turns out, and anyone who has e-filed recently has recognized this, you no longer need to mail in the actual W-2 forms. The reality is that a copy of the W-2 (and 1099s) has already been sent to the IRS, so they already have the correct information, perhaps they requested the W-2 in the past just to confirm you had received it and were working off correct information? Not sure, but either way my friend didn’t need her W-2s and e-filed without incident.

So, the moral of the story is that you shouldn’t always scoff at someone if they try the “my dog ate the whatever” excuse and you should always e-file.

Cash, cabbage, paper, scratch, scrizzle, dineros, dough, whatever you want to call it, it’s all means the same – it’s cold hard cash. There is plenty of useless and fun trivia about currency that is certainly fun to know and you guessed it, I’m going to give you at least fifty fun facts about currency, mostly US facts but a sprinkling of international ones near the end. The first bunch have to deal with US money history in general such as the creation of the Mint and the Bureau of Engraving and Printing, then moves onto specifics about the bills and coins such as what they are made of. Then we move onto some of the interesting facts that deal with counterfeiting. The 50 facts end with a few facts on what you should do with damaged or mutilated currency and then a few international facts for those of you looking to get an edge in Trivial Pursuit. I hope you enjoy it!

Oh, and in keeping with the tradition of these 50 fun facts posts, I added a few bonus facts so there are a few more than 50 in the list. If you enjoy this list, you might enjoy 50 Fun Facts about Credit Cards and 50 Fun Facts about Banks.

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While the 2008 tax stimulus check has not yet become a reality (in fact, it’s far from it), I wanted to share five ideas you should consider for this new “found money.” The bottom line is that you should take care of yourself, first and foremost, and use this money to make your life a little easier.

#1. Spend It On Essentials

If you’re at the point where you need the $300 to continue, by all means spend it on the essentials you need to survive. If you’re at this point, this is a much needed breath of fresh air… take it. Don’t let anyone tell you that you should save it for the future when you need to put food on the table now. However, you must take stock and decide whether you’re spending this on needs or just spending this on wants. You also need to look down the road at your own personal finance decisions because you’re in a tough spot – this stimulus check may not come! Cut back on some of the wants in your life and you can create your own $300 savings for the year very very easily.

#2. Pay Down Credit Cards

I know many people carry credit card debt from their years of indiscretion and that’s perfectly fine. Life is about learning, it’s about making mistakes, and since you’re still standing then hopefully the lessons have taken, right? So, if the stimulus check comes through, please do the responsible thing and pay down some of this ridiculous 20%+ interest rated debt because it’s holding you back. Hey, if you’re reading this, chances are you’ve already realized this so good for you.

#3. Pay Down Other Debts

The government wants you to spend this tax stimulus check to lessen or eliminate the effects of a potential recession, don’t listen to that crap. Take care of yourself. That means taking this money, paying off any other high interest debt (I called out credit cards specifically because of their high interest rates) because that enables you to be more efficient with your money in the future. If you lose $50 each month to interest payments, that’s $50 you can’t spend on gas, groceries, whatever.

#4. Pad Your Emergency Fund

Let’s be honest, if there is going to be a recession then your $300 (or whatever it turns out being) isn’t going to save the country. Do the selfish thing and pad your emergency fund. If you have 6 months (or a year) of expenses in there already, good for you – put more. Whatever you planned for your emergency fund was in a non-recession-threatening world right? The environment has changed so you might want to put a little more into that emergency fund.

#5. Fund Retirement Accounts

$300 today, appreciating at a conservative 7% a year, will turn into $1,160.91 in twenty years. If you have 40 years, it’ll become $4,492.34. Retirement will be a beautiful time in your life if it’s adequately funded. Do you need to spend the $300 right this minute or can you spare it to fund your happiness when you don’t have to work 40 hours a day?

Anyone else have any good (responsible) ideas for this (potential) tax stimulus check?

Don’t think cashback reward credit cards are worth it? Well, a month ago I wrote about how the Citi CashReturns card was our wedding spending secret weapon because of its phenomenal 5% cash back rewards program. It was an idea my friend gave me and we’re now thankful he thought of it (and remembered to mention it to us!) because just the other day we received a check from Citi for $532.45. That’s right, in the last month we’ve spent a whopping $13,311.25 on wedding related items (mostly catering deposits, thankfully they took credit cards!) and we’re still a month out from the actual event!

While this is an extreme example, it’s the perfect case of how this CashReturns card has saved us a lot of money. That $500 is like getting our wedding cake for free… or part of our DJ for free… or a tuxedo for free. Another awesome feature of the card is that you don’t have to request the check, something I always felt was a ridiculous requirement. Of course I want my money, why would I ever “stockpile” cash? So, without any prompting, Citi sent us the check (we almost ripped it up because we thought they were convenience checks!).

The only downside to the promotional offer is that the 5% cashback is for only three months but that’s long enough for us to pay for the wedding and a honeymoon… all at an instant 5% discount!

If you’re wondering where your stimulus check is, try this IRS tool.

Update: The bill has passed, the checks will be mailed out based on this stimulus tax rebate check schedule, so file your returns (even if you didn’t need to) to get your check.

I wanted to make an addendum to the article I wrote about the 2008 Tax Rebate Stimulus package that was recently passed in the House of Representatives. There have been a lot of questions as to how much someone would get, what tax year the rules are applied to, what counts as a “child,” etc.

First off, I think we are still too early in the game to be discussing those things because the Senate still needs to pass a similarly worded bill, the two bills have to be married, and then the President needs to sign it. Then the number crunchers have to do the math and then finally checks will be mailed out in May or June or July. The biggest of the hurdles will come in the Senate but ultimately there still are many hurdles. This “economic stimulus package” (I put it in quotes because there is fierce debate as to the effectiveness of the package) is still far from a certainty. Preparing as if it will appear in a few months would be a mistake.

Secondly, since you won’t have to do anything (you don’t file a form, you don’t call anyone), there isn’t really much you should do. If it goes through, a check will arrive in the mail one day in May or June or July and you’ll find yourself a few hundred dollars richer. If you’re just treading water, maybe that gets you some breathing room. If you’re more financially stable, maybe you put that towards some debt or pad your emergency fund. If you’re looking to make a purchase that’s contingent on getting that check, I’d wait until after it clears before swiping your card.

lastly, don’t believe the mainstream media when they say that a deal has been struck and that you will definitely be getting money. A deal was made in the House, the other chamber has yet to pass something, and Congress’ idea of breakneck speed leaves much to be desired. Do not count on this money!

I separate the world of stock market traders (not actual market traders, I mean individual investors) into three categories: hardcore, informed, and casual. The hardcore ones are the ones who pore over financial documents, scan the news wires, and in general are practically up to the minute in terms of knowing the mind-set of the market. The informed ones are those who read read the news as it happens, may scan annual reports, may read some analysis documents, but in general are midway between hardcore and casual investors. The casual investor is the one that reads the news from time to time, generally goes with mutual funds, has a very general sense of the market, and on the whole isn’t as informed and relies, albeit unknowingly, more heavily on localized information (what their friends say, what a few of their favorite websites say, etc.).

I guarantee only a small subset of the hardcore market traders could’ve even predicted that the stock market performance on Wednesday was going to turn out that way. Before the bell, futures indicated that the market was going to collapse and the Dow Index was going to fall 500 points. Five hundred points. Would anyone have predicted that the Fed was going to swoop in and cut the federal funds rate by a whopping 75 basis points? Even after the bell, we were see-sawing around a loss of 200 points… until miraculously sometime in the late afternoon the market rallied like crazy and we ended up nearly 300 points?

You know what this taught me? You cannot time the market. As I mentioned in my 5 year stock market rule a few days ago, emotion dominates the short term because there are so many individual investors. It’s akin to how the world of poker changed when amateurs entered the tournament fields and threw it on its head. (Pros know the odds by heart, they play “correct strategy” based on those odds; amateurs don’t know the odds as well and often just try to catch some good luck and make “bad” decisions)

I cannot time the market, chances are you can’t time the market, so please don’t bother because you will find yourself disappointed, frustrated, and likely a little poorer for your troubles.