The first of the economic stimulus rebate checks were planned to be distributed this week and it seems as if it’s created a bit of a feeding frenzy. Retailers such as Kroger and Sears are offering financial bonuses while Wal-mart is offering free check cashing and a few price breaks on food items. Of course you could take advantage of offers like these, but what should you do with your rebate? Well, luckily, there’s plenty of advice to give you food for thought. Newsweek suggests the following:
- Kill the [credit] card debt
- Add to it by getting a retailer bonus
- Buy an item that’s good for the environment
- Save it in a retirement account
- Sock it away for college expenses
- Have needed medical work
- Take a vacation
- Give it away
CNN Money has similar advice:
- Spend it on environmentally-friendly items
- Get a retailer bonus
- Pay off debts
- Invest it in career development
As does Smart Money:
- Don’t get a refund-anticipation loan
- Save it for your emergency fund
- Contribute to an IRA
- Pay off debt
- Save it for college expenses
- Pay bills, mortgage, or rent — 24%
- Save it — 22%
- Pay down debt — 20%
- Spend it on food, gas or other essentials — 13%
- Spend it on non-essentials — 11%
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MSN Money takes a different course and suggests you invest your rebate.
But with all this advice, what will people do? As of this writing, an MSN Money poll of almost 150,000 people listed the following as what respondents planned to do with their rebates:
That said, responses to the issue are very widely varied.
In the end, the prudent choice seems to be to pay down debt or save the money. The fun thing would be to blow it on a big screen TV or some other sort of purchase. There are certainly lots of choices — but what do you plan to do with your rebate?
vegas and a secondhand laptop
Damn student loans… I’ll be putting my $600 towards paying those down.
@MichaelSF:
I agree, SF $100,000 is definitely barely middle class. Not all parts of California are that extreme. However, CA does have a much higher cost of living than most states in the union.
I also have to agree with the sentiment about the $600. It’s like the government is saying:
” Sorry you won’t get any worthwhile rate of return since you decided to be a saver instead of a debtor. Ya know, since we dropped interest rates below the real inflation rate (cost of oil and other things not counted normally). But as a consolation we’ll give you $600 bucks to blow like all those fools who over extended themselves.
Thanks Uncle Sam for enabling the addicts. All I want is for my hard earned and SAVED money not to be worth less than crap. Also $300-$600 is not that much money, I can’t even pay rent on that.
@MichaelSF: Yes, I understand, although I wouldn’t say $600 is equivalent to $20 (after all, $20 is equivalent to $20).
My GF and I were recently looking at our long-term finances and came to a pretty depressing realization. That realization was that it would take a LARGE amount of money to register a significant improvement in either of our lives. In my case, if I inherited $50,000 tomorrow, tax-free, from an unknown relative, I’d barely notice an improvement in my financial problems.
(Of course, I could buy $50,000 worth of trinkets I don’t need, but that’s not the point.)
@falc: We’re doing home improvements, too. We were planning on getting a backyard fence with our yearly tax refund, but then our furnace died. So now we’re getting a fence with our monkey money.
Ironically, many consumers are using the stimulus check to file for bankruptcy.
I’m going to start saving to buy my girlfriend an engagement ring.
Home improvement tops the list this year. Then we can tell the insurance company to eat rocks and die.
New extension ladder = $209
8 gallons paint = $180
New String Trimmer = $150
brushes, rollers, etc = $ 50
Pizza for the crew = $ 12
Savings = $300
I will put some into my savings, some into my checking, and that’s it.
@MichaelSF: Really? You sound pretty snobbish. It makes a big difference to the little people like me and my room-mates (yeah, we share a small apartment to afford rent).
I’m investing mine in gold.
You know, so when society collapses I’m covered. DUH.
I’m adopting a cat from a rescue with mine. This way when I stay home to save money I’ll have a new companion. The rest is paying off my minimal debt.
I am going down to Home Depot to buy some wood and nails so I can make my own waterboard simulated drowning device!
[www.flickr.com]
“I feel so cold,
On hookers and gin,
This mess we’re in.”
- Portishead, “Western Eyes”
I’m going to sock it away until 2010, by which point it will have ballooned to $612. The economy will have cratered so deeply by then that the median home price in SoCal should be right around $700, and I’ll get an 80-year fixed mortgage for the remaining $84. (I have excellent credit.) Sa-weeeeet!!
In the end, the only thing this
“economic stimulus” is going to stimulate, is banks.
Debt, debt, and debt, with a side of debt. Maybe we’ll take $50 and pay for a new Wii game.
In theory, giving mine to Sallie Mae will make it easier for them to lend out money to current students.
I’m going to start my own oil ready reserve, complete with canned sardines and bottled water in my own bomb shelter beneath the Adirondacks. Then, when Americans can no longer afford oil, I’ll be sitting on my high horse and selling it for obscene amounts to make an extreme profit….
Oh, damn, the President got to that idea first….
@Greg A.: Hilarious! I love it. Don’t forget to factor in inflation, your $612 is in 2008 dollars. By 2010 that might be a loaf of white bread, and package of bologna (if you’ve got the mail-in rebate).
We get one of the big checks (married with a child, woo-hoo!). This just goes into the pile, it will eventually be passed back out to the mortgage company, BMV, student loans, and Lowe’s, and the bills for baby #2 who is racing the check to see who gets here first. All this after collecting 1.25% for as long as possible in the good ol’ losemoneymoreslowlyat1.25% account.
Today’s my birthday, so maybe I’ll nudge the wife toward the PS3′s again too, but that will likely be futile. GTA 4 is not a persuasive argument for her.
I was planning to pay down debt but since I already had plans to go to Vegas, I will buy my airfare with the money.
@ironchef: Gee, my heart bleeds for poor, overpaid you.
While I’m only getting half the “advertised” amount because I don’t make enough money (because of course, the best way to stimulate the economy is to give money to people who don’t need it as much, mm-hmm), I’m still going to sock it away for a downpayment on a new(-to-me) car. Mine is pushing 200,000 miles and I bet I have to replace it this year. It’ll be good to be able to save something towards it rather than buying some craptastic $300 beater (again).
Nevada brothels here I come!
xBox 360 & GTA4. But then I was going to get them anyway, this just means I won’t have to spend my own money.
So thank you US government for allowing me to buy video games that (according to Jack Thompson) destroy the moral fiber of this country.
Maybe with the leftover I can by sex toys to help further the moral decay of this great nation.