Don’t Spend that Tax Rebate Just Yet

I participate in a couple of online forums where members have been eagerly discussing the various ways in which they plan to spend their tax rebates this year — $300 for retirees, $600 for most individuals, $1,200 for married couples and $300 for each child per family. While some have spoken of saving it or paying down debts, others have begun dreaming of the things they’re going to buy and planning vacations. Before you book those flights to Italy or start checking out HD TVs, I’d highly recommend that you read an article by Liz Pulliam Weston on MSN Money, “America, don’t blow this rebate.”

The main points covered in the article are:

  • Spending Money is Not Your Patriotic Duty
    The U.S. Government is hoping Americans will spend their rebates and give the economy a temporary boost, but you should not consider this your patriotic duty, and instead look to your own finances first.
  • Credit card rates are on the Rise
    So if you have credit card debt, this is the time to pay it off rather than put more on it.
  • If you are going to buy, buy American
    Buying something made in China or taking a vacation abroad will not be doing your patriotic duty. If you are going to buy something, let it be American made, and if it’s a vacation you’re after, let it be a local or domestic one where the money spent goes to the U.S. economy and not a foreign one.

My suggestion would be to put it all in a high-yield savings account if you don’t have debts to pay off. If there is something you or your family really needs, by all means do what you need to do, but if it’s only something you want then I’d think twice about it first. This could apply to all money and not just this tax rebate.

For more information, I’d highly recommend reading the entire article. And be sure to file your 2007 taxes by April 15th to get on the tax rebate mailing list.

America, don’t blow this rebate
by Liz Pulliam Weston

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