PFD time: To spend or not to spend

Posted: Monday, October 14, 2002

Florentino Acosta didn't wait for a rainy day to spend part of his family's Alaska Permanent Fund dividends this year.

The city worker shopped with his wife Virginia and son Paul at Sears in the Mendenhall Mall during the break in the rain last Thursday afternoon. He planned two major purchases for this year's PFD.

"We'll buy an electric range and a computer," said Acosta, who like most Alaskans opted to have his dividend directly deposited into his bank account.

He bought the range Thursday and ordered a Dell computer on the Internet. Acosta said his family usually saves half of its dividends, and doesn't always spend the other half right away.

This year, though, is different.

"It's good for the economy and the people, so why not?" he said.

The 2002 dividend is $1,540.76, $310 less than last year's payment. The dividend was directly deposited into bank accounts Oct. 9, and the Dividend Division of the state Department of Revenue will begin mailing checks Oct. 17. An estimated 586,052 Alaskans will receive this year's dividend.

Chris Jensen, owner of Southeast Furniture Warehouse, said he had almost 100 percent more sales last week than in a normal week, an increase he has come to expect during PFD season.

"It was crazy," he said.

Greg Schatz, warehouse manager for Costco, said sales in all departments were up slightly from the week PFDs were paid last year.

"We sold a lot of computers, televisions, electronic items," Schatz said. "Everything picks up, though. For each department we saw increases from last year."

Not everybody was spending their PFDs, though.

Amber Timothy, who just bought her first home in Juneau, shopped with her son Reese at Jensen's Home Furnishings in the Nugget Mall on Friday afternoon. She said she and her husband plan to save most of this year's dividend.

"We try to have six months of income in the bank, so this will go towards that fund," Timothy said. "I'm just here looking, torturing myself."

Julie Burns, also in Jensen's Friday, said she was just looking as well.

"I'll use part of the PFD to pay bills, and part of it for a family vacation," Burns said. Her family plans to take a trip to Phoenix to watch NASCAR races this year.

Both Burns and Timothy saved previous years' dividends to make down payments on the homes they purchased in the last year.

The Alaska Permanent Fund Corp. has a calculator on its Web site, www.apfc.org, that allows people to calculate the value of their PFD over time if they choose to save it.

Assuming a conservative interest rate of 1.88 percent, the current average rate for a certificate of deposit, or CD, this year's $1,540.76 would earn $151.73 in interest in five years. In 10 years, the dividend would be worth $1,859.17.

Christine Schmid can be reached at cschmid@juneauempire.com.



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