Jan 23, 2008

What will you do with a tax rebate?

In case you missed it, President Bush says he wants to give a tax cut in the form of an $800 cash rebate to individual taxpayers this year ($1600 to taxpayers filing jointly). If the tax rebate comes to fruition, what would you do with it? This is a question that many personal finance bloggers have been discussing - most pf bloggers have prudent plans for their rebate, such as beefing up their emergency fund or paying off debt.

I think such plans are admirable, and (assuming we weren't outside the income limits for receiving a rebate) my first inclination would be to add our tax rebate to our car payment fund. However, it seems to me that simply saving the money would be rather unpatriotic. After all, the rebate is part of an "economic stimulus package" that's supposed to help revitalize the economy. And I'm nothing if not a patriot. I love my country. I want us to thrive, prosper and succeed as a nation.

So I've been thinking. If the rebate comes toward the end of the year, when we'll be buying our new car, I'll be all set. The money will go toward the car. But if the money comes months before (or after) that, we could spend it on something that we've been wanting but have been putting off for some reason or another. Like a washer, if we still need a new one. Or new blinds (I would love to replace all of the blinds in our house). Part of the money could go toward a Scooba. I think I'll make a list of things that I would like to spend money on if we had more money to spend. And then, if we happen to get that rebate, I'll have a lot of ideas on how to spend it.


Kacie said...


I think depending on when/if the check would come, we'd put a big chunk of it in savings, though.

I'll do my best to be patriotic and buy a little something--whatever we're needing at the time but doesn't fit into the regular budget.

Krista said...

I would pay down my car loan. Everything extra right now is going to debt.

Anonymous said...

Considering how stupid I think the rebates are given the national debt level we have (the real debt level, as given by the Mr. Walker, the Comptroller of the U.S.), I will save anything they send us. I personally think it is unpatriotic for the government to put the country into even greater debt and to pass that on to our children. Apparently, they are too afraid of some temporary pain and think they have to "fix" everything. Have you heard about the plans to change contract law by stopping foreclosures and forcing mortgage companies to renegotiate with people who can't pay their current mortgage - the one to which they agreed?

Okay, I'll stop my rant now. But I'm saving anything they send me to pay the higher taxes they'll eventually be charging.

Unknown said...

If this 'rebate' is going to be similar to the 'rebate' of 2001, don't be fooled! The rebate of 2001 was actually an advance on your tax refund of 2002; meaning that your tax refund was $600 less!

I won't be fooled this time; most of mine will go into savings.

Anonymous said...

Sigh! The rebates would be limited to individuals whose income is $75,000 or less and working couples with incomes $150,000 or less.

Anonymous said...

I"m with mar on this one. It's just like the whole "read my lips: no new taxes" stupidity. Taxes are evil. I hate 'em. Everyone hates 'em. But this country is 900 gazillion trillion dollars in debt. We need to stop thinking of quick fixes for the moment, and think longterm.

Plus, I'm out of the bracket, so I'm not eligible for any refund at all. But dont' worry, I haven't curtailed my spending in the least bit anyways.

Anonymous said...

I'm totally not going to be patriotic, I plan on saving the money if we qualify, which I am not sure we will.

I like your ideas and kudos to you for showing some patriotic love.

Take Care


MEG said...

I agree! I've been saying that as my patriotic duty I'll be sure to spend at least half of any rebate I get.

It'll probably go towards general discretionary spending such as alcohol, eating out, maybe a pedicure, etc. Or I might spend part of it on something I need like a car tune-up or whatever else comes up this summer.

But I could actually use it to purchase the flat screen TV I've been putting off buying for over a year now! A $600 rebate would probably cover half of the model I want, assuming prices drop a little more between now and summer. Hooray! American consumerism at it's finest!