What to do with your Tax Rebate!!

Now this is very hard for me to say living financial conservatism and me with my beating Accountant heart:

Spend it all!

The key is spending it wisely.

Option 1: If you have crippling debt, please pay off your credit cards or student loans. Dragging around interest is a burden to you and your family (if you have one!). I encourage everyone I know to be as interest free as you can be. Take myself. I do have a mortgage, as much as I'd love to pay off my house it just isn't feasible right now, and I have to live with this interest. Mortgage interest is a way of life, and if this is the only interest you have than feel free to choose another option. Though this option won't stimulate the economy as intended, it will reap far greater and far reaching implications on your personal financial future and in turn, the economy. It just won't have that immediate boost as the rebate intends.

Option 2: Put the money in savings. Now normally this would be my option of choice. Because I'm a true believe that you should always have your money working for you. If I have fifty dollars in the bank drawing interest and you have fifty dollars in your wallet, then my money is working harder than yours. Simply put, interest builds and if it isn't working against you (in the form of debt) it can work for you in the form of savings! If you are living paycheck to paycheck or have very little savings, then this option is for you!

Option 3: This is the option that I'm going to be following. The rebate was originally intended to be a way to stimulate a receding economy. The more things we buy the more things are manufactured and the more jobs that are created and the more things we buy. This is a very simple look at the principle. If you feel so inclined, I would also suggest that you participate in Option 3, as long as you don't fit Option 1 and you're okay skipping Option 2.

Option 3 is also really good if you've been saving up for a specific item, use your rebate to buy it now (or when your check comes in) and keep your savings for something else.

Another hint is that I've received my Income tax refund and I've decided to treat it as I would my rebate. So, I'm spending now! But, when my rebate comes in it is going in the bank. You can do the same if you have similar refund/rebate coming your way.

Things to spend it on
1. Personally, I would say American made products. This way has the greatest and fastest impact on the national economy.

2. Services. This has a big impact on your local community.

3. That item you have been saving for. If the rebate covers the item, buy it and use your savings for something in the future. Or if you have to combine part or all of your savings for the item and your rebate, I think that would be ok as well. Remember always have enough savings to support yourself for 3 months in case of job loss.

4. Splurge item. Maybe you haven't been saving for anything. Maybe you haven't been saving financially, but you may have been saving it mentally. Every time you see it in the store or on tv you think that you may like to have it. Again, as long as you are secure in your personal savings, just do it. You weren't expecting this money, so use it as it is intended.

5. Charity! The income you receive from this rebate is taxable on your '08 income taxes, but one way to help alleviate some of that is to give the money away. This is especially good for those of you who itemize. But, remember, that charity is great even if you don't get to count it on your taxes. (If you are wondering, I do include my charitable giving on my taxes simply because that may mean a bigger refund, which can then be used for charity again!) Uncle Sam appreciates your charity.

6. Travel. You may say you are not very materialistic. Then go somewhere! That costs money too! I'm saving some of my rebate for a trip later in the fall. Just remember that the airlines are starting to charge more for your second checked bag!!

Well, I hope you have fun with your rebate...fun responsibly!! If you have any questions, let me know. I hope this helps!