Oh...What to do with the rebate?

Well, as of a few weeks ago, it was announced many – NOT ALL - tax payers will receive a tax rebate. The amount would be dependent upon your income and marital situation along with some other small factors. If you are married with no children and make less than $150K, you will get back $1200. If you have any children you claim as dependents, you will receive $300/child.

For the sake of this entry, we will assume you are single, no children, and make less than $75K which would give you $600. Where I fall in to all this is not important to this blog though it would not take a genius reading this blog to figure out where I stand with some of the factors.

I will not advocate a choice in this entry because I don’t think it is my role to do such a thing. I will try my best to point out as many options as possible. These choices are in NO specific order as I state again I am not advocating any choice.

#1 – SPEND IT LIKE A ROCKSTAR – This is money that you were not supposed to have to begin with so you will never miss it. You may have something you have not been able to get for some time and this is the opportunity to go get it. You want those new golf clubs and this is the time to purchase them. You are ready for a nice shopping spree to purchase some shoes and other fashion accessories that will make you look ever better when going to work or shaking it on a Saturday night. You can buy some nice items and then buy a few rounds at the bar with your old and new friends. In the end, it would be a good time.

#2 – SENDING MONEY TO CREDIT CARD COMPANY PAYING DOWN DEBT – If right now you are carrying debt on your credit card which includes interest, you can make an additional payment helping you decrease that debt as well as decrease the amount of interest you are paying to the credit company. Shrinking or having no debt is always a good thing as the interest ends up eating away at your hard earned money. If you are paying interest, take a look at how much of your monthly payment consists is interest versus the principle – the money that actually went toward the item you bought with the plastic. Sending the rebate money right to the credit card company and following it up with charging more would make end up falling number #1 and taking away any benefit for this point.

#3 – DO NOTHING – Put the money in the bank for a rainy day. Every one is not invincible. Bad things happen and better to have the money on hand than try to scrape it out of the regular income. It makes life stressful and possible for you to breathe easier.

#4 – INVEST THE MONEY – There are different plans out there. You might have add some additional money – like a small stipend from your 2007 Income Tax returns to get a total of $1000. Please do not quote this blogger on that amount. As for possible scenarios, you might invest in a mutual fund. I am not going to suggest one specific mutual fund because that is a completely different blog site I would have to start in order to get into which choice is right. I will make a HUGE assumption – the mutual fund you choose makes 6% annually over 30 years. If you let the $1000 sit there for 30 years, you will have nearly $6000. In other words, it went up almost 500%.

#5 – GIVE MONEY TO CHARITY – It was not money you were supposed to get and there are plenty of worthy parties who would make the most with that money. You would be helping out the economy at the same time. It is always smart to look into charities to see how they work and figure out where their money would make the best impact.

#6 – SPEND MONEY ON “BORING” ITEMS – I don’t think I would need to create a list of those items. You have your car which needs those items you have been putting off done here soon. You can spend it on your living quarters whether it is appliances or some other necessities – like an IRON. I digress.

#7 – ATTEND CLASS – This can include different things. You can attend class which will develop professional skills going a long way in helping your career and lifting your pay scale. You can attend some fun class which may include exercise or learn more about a hobby. You may even meet a new friend.

I am not advocating any particular choice. I just wanted to make sure there were not any stones unturned when you got that check in your mailbox. I am sure there are more choices.

DISCLAIMER – I am not a financial advisor. I am not responsible for the results of your decisions that may be influenced from reading this posting.