by Shirley Anderson-Porisch, U of M Extension
Already making plans for how you'll spend your tax rebate check from the federal government? The frist economic stimulus checks are due to arrive in early May.
Consider some fo the following ways to make the very most of your tax rebate check:
- Open an emergency account. Most Americans do not have money set aside for those financial emergencies that alwasy seem to happen when no cash is available. The rebate check is a great start or addition to an emergency account. The goal might be to have three to six months of monthly fixed expenses in the account.
- Pay for repairs. Maintaining expensive possessions now will result in dollars saved tomorrow. Use the refund to repair a leaky roof before it develops into a bigger problem; replace car tires with new, safer ones; or fix home ceilings, walls, floors, doors, windows, etc.
- Make an extra home mortgage payment. Though you will not feel the benefit immediately, making an extra mortgage payment now puts you one payment ahead and can save you a payment later.
- Fund your retirement account. About 30 percent of all working Americans have no money invested for their retirement. If you are aone fo them, seriously consider setting up or contributing to an IRA account.
- Open a 529 College Savings Plan. A four-year colege education can cost upwards of $100,000. The 529 plan works much like a Roth IRA, and withdrawals are tax-free when used for higher education purposes.