Smart Money Moves for Your Tax Rebate

We couldn't help but be amused (yet again) by the news out of Washington, D.C. earlier this year.

As you know, the president signed a $168 million economic stimulus package that authorized the government to send out a bunch of rebate checks to us Americans. Being the consumers that we are, we all were supposed rush out to spend our "windfall" on products and services to stimulate the economy. The businesses selling those products and services to us would spend their profits on more products and services and VOILA! The U.S. economy is revitalized, right?

If only it were that simple. Retail sales did see a bump a few months ago but are now fading once again and the impact from the package fades. We're not at all surprised.

As always, there was good news and bad news in the economic stimulus package. And yes, a tax rebate has probably already come your way. We wrote this special Dolan Alert a while ago to help you make the smartest moves with your stimulus checks, but it's not too late!

If you haven't spent that money yet, let's start with the basics:

Most taxpayers received a check of up to $600 for individuals and $1,200 for couples from the Internal Revenue Service, with an additional $300 per child. People earning at least $3,000 but not enough to pay taxes would get $300 for singles and $600 for couples. Those making more than $75,000 and couples with income exceeding $150,000 received smaller checks ($50 less per $1,000 they make over those thresholds).

Lawmakers and the president wanted to get these bucks into our hands as quickly as possible so we'd start to spend the money. That's why this whole package was rushed through Congress.

Time for A Little Straight Talk

Before we get to the specific steps you should take now, let's talk for a moment about the big picture. Honestly, we can't help but shake our heads. We just don't get the logic.

The President and Congress encourage millions of Americans to SPEND, and yet many of these very same Americans are already over their heads in debt with an average credit card balance of more than $9000!

Good thinking. Let's perpetuate one of the very reasons that our country is in such poor economic shape. In fact, don't wait. Spend it now and pay it back later -- with interest, of course!

The government thinks that spending the rebate dough is a vote of confidence for our economy's future. We say, "Wake up, Congress! Smell the coffee and join the rest of us in the real world."

We believe it's irresponsible for our government to encourage us all to spend, spend and spend more without even a mention of paying down debt or, God forbid, actually saving some money for the tough times we think are still ahead.

Continued: 6 Smart Money Moves for Your Rebate