Thanks to a government rebate, a check might be coming your way.
Now what? Treat yourself to an iPhone?
Not so fast.
The House of Representatives recently passed a bill that would provide tax rebates to approximately 111 million households as part of a $150 billion economic stimulus effort -- including $100 billion in one-time tax rebates to individual taxpayers.
This includes a tax rebate of up to $600 for individuals and $1,200 for married couples with an additional $300 per child. That means a family of four would receive $1,800 under the House bill.
The bill now goes to the Senate, where they are likely to make changes.
Under the current Senate version, all Americans would receive a $500 to $1,000 rebate as long as they earned a minimum of $3,000 last year.
With either version, millions of taxpayers will be getting some money back later this year. This means you will need to consider the best way to use this money.Here are five smart ways to spend this money and five more ways to save it so you can bolster your personal finances:
1. Spend to Save
If you're going to spend the money, consider spending it in a way that will actually save you money in the long run.
Consider what items you can purchase that will pay for themselves and more over their lifetime.
If you are spending $3 a day at Starbucks, for example, an investment in a $400 gourmet coffeemaker that enables you to brew your own coffee can pay for itself in less than six months. Just be certain that you will actually use it and not simply have it sitting on your kitchen counter while you continue to buy Starbucks.
Another option would be to replace older appliances such as refrigerators, washing machines, dryers or dishwashers with newer, energy-efficient models. For more information, check out Energystar.gov. Many newer models will pay for themselves over time with energy savings they provide compared with older models, especially if you're replacing models over 10 years old. Even if your older models are still in perfect working order, it can be worthwhile to replace them. Selling them to recoup a bit of money or giving them to a charitable organization for the tax write-off will allow the newer models pay for themselves even more quickly.