Oregon Public Broadcasting

It’s the first of the month Wednesday and for many of us that means payday.

To add to the good news, the American Recovery and Reinvestment Act means Uncle Sam has reduced taxes -- leaving an extra $30 or so in your paycheck this month.

It’s the federal government's way of trying to stimulate the economy.

Kristian Foden-Vencil is also getting an extra $30 and wonders whether people will save it or spend it.

Madeline Moore runs her own financial planning business in Portland. She says the $30 is basically the same as the last stimulus check you got – it’s just that Uncle Sam is handing it out in small slices over the next couple of years -- instead of in one large chunk.

Madeline Moore: “They want it to be smaller amounts so that people actually might spend it. They might go have another cup of coffee, or buy themselves some flowers. Or things like that they wouldn’t do if they didn’t have that $30. Whereas in the past the big stimulus check that came through last year, a lot of people did use it to pay off debt or put it towards their retirement.”

As a financial planner, Moore says what you should do is  save the $30 a month and pay-off consumer debt – like credit cards.

But if you’re financially savvy and don’t carry a credit card balance she says, feel free to treat yourself.

Madeline Moore: “I’m particularly big on trying to stimulate the local economy. Whether it means local retailers or even tipping a extra but somehow getting it quickly back into someone else’s pocket so it keeps stimulating the economy.”

Moore says she’ll probably be sprucing up her new home with a monthly bouquet of flowers or maybe give her stimulus money to charity.

But as a financial planner, she also feels duty bound to explain that $30 a month, salted away in a retirement account for 30 years could eventually add up to $45,000.

Madelaine Moore: “If we all go back to our eighth grade math and think about compound interest. It is amazing how money can grow. And historically it has. Obviously the last 6 months, we’ve seen this huge plunge. But over time the money will compound.”

So those are your options: save it, splurge it or pay off debt.

Brian Farr is what’s known as a Financial Therapist. He helps people deal with the area where their economic problems get mixed up with their emotional problems. Think of the person who feels he just has to drive a new luxury car even though he has  saved nothing for retirement.

Farr believes people at different economic levels will use the stimulus money for different things.

Brian Farr: “If they are struggling to pay rent and groceries each month, it’ll just get absorbed into those kinds of expenses, their basic survival expenses. If they’re at a middle class level, it will maybe get focused on something specific -- maybe at the upper end it’ll be just like a rounding error. People won’t have that much of an awareness of it. But I think that handing it out in that form it seems to me a better chance that it’ll get spent.”

On the corner of busy street in the blue-collar Lents neighborhood of Portland, there are two gas stations, an Arbys and a Fred Meyers grocery store. People here have different views about what they’re going to do with their $30 windfall.

Rhonda Gillette says it's not much for her.

Rhonda Gillette: “I didn’t know it was coming. It’s really not going to make much of an impact. So I probably won’t even feel it.”

Kurt Summer: “I’m excited about it”

That's Kurt Summer.

Kristian: “Do you know what you’re going to do with it?

Kurt Summer: “It’s probably just going to go into beer and entertainment.”

Kristian: "You’re going to splurge it?”

Kurt Summer: “I’m going to stimulate.”

Justin Donny wants to save for something big.

Justin Donny: “Yeah, it’s pretty cool. I don’t know if giving money back is going to help the economy. But probably save it. We were looking to buy a home real soon.”

Kristian: “Well, that should help the economy. Having to buy a washing machine and everything else.”

Justin Donny: “Yeah, all environmental, friendly as much as possible. A lot of revenue back into the local economy. It’s really awesome.”

Joanne Bermudez says it's not an issue for her.

Joanne Bermudez: “Well does that include the unemployed?”

Kristian: “No it doesn’t.”

Joanne Bermudez: “So I guess I have no plans for it.”

She’s right. If you’re unemployed, retired or making over $75,000 a year, you won’t be getting the extra $30 a month.