What Are You Going To Do With Your Tax Rebate Check… Stimulate The Economy Or Pay Off Debt?



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IRS-tax-refund-check.jpgAccording to the Economic Stimulus Package, the U.S. Treasury will start sending out checks in May to 130 million families.

The purpose of sending out this money is to stimulate the economy.

Personally, I do not see how $600 for a single person or up to $1,800 for a family will make a huge difference in the economy. But when my family receives our $1,300 (as we are in the phase out income range), I am sure it will disappear quickly.

I dare say most people receiving the economic stimulus package checks feel the same way.

Let’s see… I could spend it on a new flat screen TV, as our family’s main TV will be all but obsolete in 6 months when HD TV’s replace analog ones and become the the only acceptable format for viewing television programs. Or, I could spend in a new leather sectional I have had my eye on, as our 11-year-old furniture is beginning to show serious signs of wear. If I have already covered these needs with my regular income tax return, then perhaps the money can be used on basic home maintenance such as painting or replacing gutters. These all sound like good ideas, don’t they?

Realistically, though, I see the rebate check being sucked into regular household expenses like our twice-yearly neighborhood/pool fee, or into credit cards that we are attempting to pay off.

While these checks are meant to stimulate the economy, I see the checks being more of an economic relief package than an impetus to go out and spend.

MSNBC suggests that you “fund your own economic stimulus“. In spite of the fact that the government wants you to go out and spend that money on common retail items, the article suggests you do things like pay off your bills, or even pay a utility bill for a year in advance to provide a bit of breathing room later. They also recommend paying down credit and doing preventative maintenance on your vehicle.

So what do you plan to do with your tax rebate check? Here are some more ideas.

Andrea

I have been a certified tightwad striving for financial freedom since I became pregnant with my first child -- and I decided to find a way to stay home with him full-time. I enjoy sharing my personal experiences in my journey back to financial health and planning for a future -- which will include sending 2 kids to college and early retirement.

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