Put that rebate check into your emergency fund, before it's too late!
If you work a full-time job and aren't making a gadzillion dollars, chances are you've received (or will receive) a $600 check from the government.
Whatever you do, DON'T use it to "stimulate" the economy.
Don't let the Iraq war fool you -
It's not patriotic to be in debt.
For all of you folks out there who always say that you don't have enough money to start an emergency fund, this handout really is a prime opportunity. Take your $600 (or whatever amount you received), spend, say $100 of it, if you feel the need to, and put the rest of it in a high-interest savings account.
If you haven't started an emergency fund yet, this is now your emergency fund. While an emergency fund should have more than $500 in it, at least that's a start.
Try to add $20-$50 a month to this savings account. Otherwise forget the money exists.
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WEALTH, MONEY AND LIFE NETWORK SERIES
The Wealth Money & Life Network is a team of personal finance bloggers ranging in age from 20-60. Each month, we choose a different topic to focus on and write posts about from our perspective. This month's topic, if you haven't guessed, is "emergency funds." Check out some of the other great posts on this topic over at the WEALTH, MONEY AND LIFE NETWORK
7 comments:
"It's not patriotic to be in debt."
lol, love it
Whatever you do, DON'T use it to "stimulate" the economy.
Don't let the Iraq war fool you -
It's not patriotic to be in debt.
Why do you assume EVERYONE is in debt? What if I want to spend it? Is that bad?
I don't assume everyone is in debt.
There are plenty of people not in debt. I'm one of those people.
I still am planning on saving most of my tax rebate in my emergency fund or investing it for retirement.
If you need to spend the money, if you need to spend it on food or to pay off credit cards, that's where it should go first. Then savings. Spend some of it - but it's so rare to get a hand out like this, and for people who are in debt, or even who are breaking even, it's a great opportunity to start saving. If you've been saving, $600 is a decent addition to your savings account, regardless of how bit it is.
I guess my point is, people are at various stages in their financial lives. You're debt free, but you're still saving for an emergency fund and retirement. On the other hand, I'm debt free, but I also have a fully funded e-fund, a schedule to max out my 401k and Roth by December, and actively manage other financial goals throughout the year with regular earnings. So this windfall - or as you call it, "hand out" - means something very different to me.
I see it as an opportunity to help those less fortunate. Pay it forward and give a "hand out" to someone who really needs it. Maybe even go shopping or enjoy the vacation I've been putting off for so very long. You know, "stimulate" the economy.
Your title says "Put that rebate check into your emergency fund, before it's too late!" then you mention debt and say DON'T use it to stimulate the economy, like spending is bad. My concern is, your post assumes everyone has debt and/or no savings. I understand the need to prioritize, but if you're not at that basic phase anymore (i.e. learning how to manage money), it's ok to spend - reasonably. In personal finance, there is no one size fit all.
Single Ma: I appreciate your post and thoughts. I was writing more for people in their 20s who are either in debt or probably building their retirement savings accounts or emergency funds. Obviously if you already have that, there is nothing wrong with spending the money, whether that be to take a trip, for charity, or any other "economic stimulation" purchases.
I was mostly responding to people who either have debt or who have very little savings, yet spend the money, and later wonder why when an emergency happens they end up in debt, or further in debt.
Nice post! I paid an unexpected bill with most of my check, but put the rest toward my emergency fund. It's small, but it's growing, and I figure that's where most people start.
Good Post - My family and I were fortunate enough to get $1,800 back. By nature you want to run out and spend it on a new TV or a fun toy but we will be putting into the kids 529 plans.
To your point about '... It's not patriotic to be in debt...', I think that we live in a country who loves debt. Debt is everywhere. It is way to easy to get credit cards and to declare bankruptcy. I am not saying that everyone is in debt, but I think it is a major concern and problem for our country.
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