5 Wise and 5 Stupid Things To Do With Your Tax Rebate

January 25, 2008 · Filed Under · 12 Comments 

This Economic Stimulus Package is not meant for me. For me, it should be called the ‘Better Life For Me and My Family Package’. I am looking at my rebate check as a normal paycheck with a twist. I am not going to go buy a 50″ Plasma, or use the money for an excuse to do a huge shopping spree. The twist is that I am going to use it to grow my children’s 529 college plan. That is where my money is going. It looks like I am going to get $2,100. My wife and I make less than $150,000 combined, and we have three kids. Finally these kids are making me some money! ;-)

5 Wise Things To Do With Your Rebate

  1. Invest In Yourself. This is not free money. This is a Tax Rebate, meaning the U.S. Government took this money from you awhile back and now they are giving you some back. Treat it that way. What better way than to use the money to go back to school and improve yourself. Check out your local community college catalog and find some classes that interest you and would further your career or start a different career path. The community college where I grew up offered great computer classes for the novice all the way up to advanced programming. Improve your skill set which will in turn increase your earning power.
  2. Start An Emergency Fund. I error to safety on this one and shoot for having six months living expenses available. I will tell you what, when I was able to accomplish this I could sleep much better at night. Especially with three small children. This fund covers loss of job, washing machine going kaput, major car repair, all that stuff in life that happens when you least expect it. Heck, let your rebate check start or pad your own emergency fund. This will provide a lot more security than a 42 Inch LCD or some other new gadget or gizmo. Although I would love an iPhone…..Kyle, stay focused.
  3. Improve Your Children’s Future. Starting a 529 College Savings Plan if you have not already. These plans let you invest money for your child’s college tuition and it grows tax-deferred, and when the money is taken out, for college costs only, it comes out federally tax-free. I like the 529 because if my oldest child decides he does not want to go to college, (and assuming I don’t kill), he cannot take the money out and buy a motorcycle and a tattoo, I can use the money for my other children’s college tuition.
  4. Pay Down Debt. Use your tax rebate to pay down a big chunk of your credit card debt. Better yet, do you have a credit card where you could pay off the entire balance with your rebate? I remember being able to do that once when I was getting out of debt and it felt great to be able to completely pay off a credit card in one swift payment. Sweet!
  5. Fund Your Retirement Account. Put your tax rebate in your retirement account and let sweet time do its thing. Thanks to compound earnings, your tax rebate is going to grow substantially over time, especially if you are a young whipper snapper like myself.

5 Stupid Things To Do With Your Rebate

  1. Thirsty? Buy Some Water. Not just any water, buy a case of Bling H2O! At $40 a bottle you will surely quench your thirst for studipity. If not, try drinking this stuff from a dog bowl with your canine.
  2. Levitating Hover Scooter. Skip The College Savings Plan and buy your child a levitating hover scooter from Hammacher Schlemmer. Albeit it cost more than your rebate amnount, but hey, that is what credit cards are for. Afterall, you want your kids to have the best. Your child will never have to exercise again, they can just levitate around the house.
  3. The Invisible Canoe-Kayak. This made me laugh. Also from Hammacher, not only can you see into the murky water a couple feet but you are also invisible to all motor boats, wave runners, etc. For only $1600 you can have this accident waiting to happen all to yourself.
  4. Double Your Money! Scratchers, Lotto Tickets, slot mahines, blackjack tables, pick your poison and press your luck. Afterall, why be happy with what you have when you could possibly have so much more.
  5. And last, but not least, what many are going to do with their tax rebate:

Don't Be Stupid!

What do you have planned for your tax rebate?

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Comments

12 Responses to “5 Wise and 5 Stupid Things To Do With Your Tax Rebate”

  1. Mrs. Micah on January 25th, 2008 3:56 pm

    Debt repayment definitely. But now that you’ve mentioned the hover scooter…. ;)

  2. Kyle on January 25th, 2008 4:04 pm

    Mrs. Micah…imagine the possibilities, taxi service, rent it out at birthday parties, it would pay for itself in no time!

  3. Lynnae @ Being Frugal.net on January 25th, 2008 5:37 pm

    I’m with Mrs. Micah. Mine’s going to debt repayment.

  4. Michelle Barton on January 26th, 2008 7:17 am

    Last year I used part of my rebate to pay off an $800 debt and the remainder to fund a backpacking trip to Europe. This year I only expect a few hundred dollars which will be used for regular expenses because I will be receiving it the same month I take my maternity leave and my income will be cut back by 50%.

  5. Jennifer on January 28th, 2008 9:31 am

    But I *need* a hover scooter. LOL.

    Ours will be going to an IRA.

  6. Tara on January 29th, 2008 3:34 pm

    Well, assuming I might get one of these ” Economic Stimulus Package” checks, it is all going to the “Get Us Out Of Debt” fund.

  7. KT on January 29th, 2008 7:30 pm

    Well I could dispute #5 given next year Your gonna wind up buying a new TV anyways with the Digital revolution. Last Time I checked even at 20″ an HDTV is like 400 dollars.

    Or you could spend some of it on a converter box at about $80 (dont count on the coupons)

  8. Stephanie on January 30th, 2008 6:19 am

    Debt reduction will be the destination of any money we get….though I have to admit I am very tempted to look at a new lap top. My desk top is so slow, and I could do so much more with a laptop, like blog while the kids are at band lessons…..See me justifying here? Must. Have. Self. Control.

  9. JvW on January 30th, 2008 6:55 pm

    Either right to the credit cards or into the emergency fund. Depends where we are in the debt repayment when we get it – if we’re down to just the 0% card, then it’s e-fund all the way!

  10. Annie on January 31st, 2008 9:24 am

    I think ours will go to the home improvement fund. That way, we’ll be “stimulating the economy” like the politicians want and improving the value of our home. Not that the politicians affected our decision. And I really do want a nicely landscaped and fenced yard.

  11. Kyle on January 31st, 2008 11:42 am

    Debt reduction seems to be the winner! Thanks all for the comments.

    @ Annie, that is a great thing to do with it. Not only do you improve the value of your home but you get to enjoy a beautiful yard. Thanks for stopping by!

  12. YE on February 12th, 2008 9:01 am

    Let’s see, plasma TV…check!
    I guess I will use it to pay down my debts :D

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