How should I spend my economic stimulus rebate?
Photo by: Tracy O
I recently wrote an article answering the question: Is the economic stimulus package a loan? That article stimulated some discussion between my wife and I about what we will do with the money when we receive it. For us, how we will spend it is a pretty big decision. See, we have 6 kids and based on the Economic Stimulus Payment Calculator we’ll be receiving $3,000 ($1,200 for us and $300 for each child). Some of the ideas we came up with include:
- Payoff our debt – This of course was the first thing we thought of. After all, that is our focus right now and $3000.00 would take a big chunk out of debt and significantly accelerate our debt snowball.
- Go on vacation – We’ve had a tough past year and to be honest haven’t had a good family vacation in a long time. One could argue that “we deserve it“. $3000.00 would give us a really nice trip to the beach for a week, or maybe even a few days at Disney.
- Buy stuff – We need and want a number of things. Our house needs work, some of our furniture needs replaced, we’d like to replace our deck, etc, etc. The money would certainly allow us to buy a few things we’ve been putting off as we have focused on our debt snowball.
- Save it – We would like to be another house on some land a year or two from now and the rebate money would be a nice start to the down payment. This is really a tempting option for us, since we haven’t even really started saving up the money yet.
The purpose of the economic stimulus package
Here is my big struggling point with some of the options above. The purpose of the package is to do exactly as it’s named, stimulate the economy. By paying off debt or saving the money we aren’t doing what the package is intended to do. From my perspective, the rebate is intended to be spent. Doing so increases demand for products which will create jobs and spur the economy. The other options we looked at, going on vacation and buying stuff will do exactly as intended and place the money right back into the system.
Since we’ve been focused on living more frugally, saving more money, and paying fairly aggressively on our debt, spending $3000.00 seems incredibly foreign to me. The arguments I make above seem like an excuse to just “blow” the money and skip this great opportunity to take a chunk out of our debt.
So what to do? Spend it, save it, or pay against of debt? We talked about it and talked about it, and decided we just weren’t comfortable spending the whole $3000.00. At the same time, we want to support the efforts of our government to grow the economy. We decided to split the difference. $1500.00 of it will go towards our debt snowball. The other $1500.00 will go to either a small family vacation and repairs to our home. At least that’s the plan for now. I’m sure we’ll discuss it some more before we receive our check.
This whole decision process did make me wonder: What you folks doing with your economic stimulus rebate? Are you spending it? Saving it? Tithing it? Add a comment and let us know!