Rebate dreamin'. . . . .

I received my $600 rebate check on May 9th. That same day, I transferred the money to my ING Emergency Fund account, where it joined its friends and is hopefully now making babies. I was curious about what others decided to do with their checks. I found a post on Wise Bread asking this same question, and here are some of the responses:

"I'm realizing I could use some new clothes for work"

"I'm using it to pay taxes. Haha. "

"I'll be putting it toward CC debt."

"I'm likely to spend it on an iphone."

"We put it aside in our home down payment savings."

"Any rebate I get is getting invested right along with the rest of my income."

If you still haven't figured out what to do with your money, I can help with that! Well, actually, the Debt Diva can help! She has a list of suggestions on her website that may trigger you to use your money in a myriad of different ways, like:

Pay Down Debt Paying down credit card debt is the first priority for many people. A significant payment can save you hundreds of dollars in interest fees. You should spend a large portion of a windfall on debt, especially credit cards. You can use your extra cash in a lump sum payment or double your regular monthly payment for several months. If you don't have credit cards, lowering any outstanding debt, such as a second mortgage, will help save you money in the long run.

Emergency Funds A windfall is the perfect opportunity to start your rainy day fund. Many financial experts suggest two to three months worth of living expenses put away for emergencies like medical expenses, major home repairs or a job loss. You can start a fund, feathering your nest with a portion of your rebate and continue to put a modest amount away each month. Something as simple as an unexpected car repair can be a huge financial hit for many Americans. This fund will help protect your finances.

Retirement Funds Open an individual retirement account with some of your money or add it to an existing account. This will allow for a solid nest egg when you retire.

Invest in Yourself Strengthen your physical health by taking preventative action. Schedule any overdue medical exams - annual physical, dental cleaning, eye exams or medical procedures you have put off. You'll save in the long run if you take care of your mind and body as you age.

Savings If you are already debt-free now is a great to invest in the stock market since prices are low. Stocks produce nice returns and even as little as a hundred dollars can get you off to a good start.

Splurge The stimulus is designed to encourage you to spend the money and help the economy thrive. You could plan to spend at least 10% of the windfall on something fun for your family. By limiting the amount you spend, you will still have money left over to pay down debt or invest in your future.

And if, after reading the Debt Diva's suggestions, you STILL can't figure out how to spend that $600 to $1200 'windfall', just let me know; I'd be happy to help you---for a small fee! I am curious, though, for those of you who have received your checks, what did (or will) you do with the money?

Why can't the government be more frugal?

I just received a letter from the IRS--dated May 12--telling me that my rebate check was deposited in my account on May 9. As if I hadn't been checking my ING account on an hourly basis since May 5th. How much money did the government spend (and how many trees were killed) to tell me something I already knew?

I. Just. Don't. Get. It.
Why is it that ordinary Americans (like me, and probably you) are living frugally, economizing, buying generic groceries and taking public transportation in order to make ends meet, but my government feels that it's necessary to send me snail mail to inform me of an event that has already passed, and for which no action is required on my part?

In a general Yahoo search on government waste, I came across a website called Citizens Against Government Waste. According to the website,

"Citizens Against Government Waste (CAGW) is a private, non-partisan, non-profit organization representing more than one million members and supporters nationwide. CAGW's mission is to eliminate waste, mismanagement, and inefficiency in the federal government. Founded in 1984 by the late industrialist J. Peter Grace and syndicated columnist Jack Anderson, CAGW is the legacy of the President's Private Sector Survey on Cost Control, also known as the Grace Commission."

This site focuses primarily on government waste related to pork barrel projects, and even names the Porker of the Month (politicians who have shown a blatant disregard for American taxpayers).

Another website, called The Heritage Foundation (warning: I think this is a conservative site) has an interesting list of examples of government waste, including:

The Missing $25 Billion
The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent. Blaming these unreconciled transactions on the failure of federal agencies to report their expenditures adequately, the Treasury report con­cludes that locating the money is “a priority.” The unreconciled $25 billion could have funded the entire Department of Justice for an entire year.

Unused Flight Tickets Totaling $100 Million
A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. Even worse, the Pentagon never bothered to get a refund for these fully refundable tickets. The GAO blamed a system that relied on department personnel to notify the travel office when purchased tickets went unused. Auditors also found 27,000 transactions between 2001 and 2002 in which the Pentagon paid twice for the same ticket. These additional transactions cost taxpayers $8 million.

Embezzled Funds at the Department of Agriculture
A recent audit revealed that employees of the Department of Agriculture (USDA) diverted mil­lions of dollars to personal purchases through their government-issued credit cards. Sampling 300 employees’ purchases over six months, investigators estimated that 15 percent abused their government credit cards at a cost of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments, and cash advances.

Credit Card Abuse at the Department of Defense
The Defense Department has uncovered its own credit card scandal. Over one recent 18-month period, Air Force and Navy personnel used govern­ment-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.

And this is just the tip of the iceberg! Have you noticed any abuses of government funds? Well, guess what? There's actually an eHow website letting you know how to report it! Unfortunately, the site advises us to contact our elected officials---isn't that kind of like warning the fox that we've noticed our chickens disappearing at an abnormally high rate?

The tax rebate dilemma . . . .

According to an article at MSNBC, Americans may not be spending the upcoming tax rebate in the way politicians and economists would like us to. The idea behind the rebates is to strengthen our weakened economy by bringing more money to the market; Americans are expected to spend their 'windfall' on items such as TV's, clothing, vacation travel, and other goods.

However, it appears that at least some of us may be planning to use the money to pay down debt or increase savings. With the shaky state of the economy, families are wondering if it might be better to have that $1200 or $600 in the bank rather than frittering it away on a new, fancy BBQ or car stereo. In fact, much of the money might already be earmared for increased fuel costs, which according to the MSNBC article, won't do much to help the economy since most of that money goes to our overseas oil suppliers.

Despite the hints that the rebate money might not enter the economy for quite some time, some economists are counting on Americans' inability to live frugally. For example, David Wyss, a chief economist at Standard and Poor's, says this: "Americans have an amazing ability for self-deception, and I have full confidence that they’re going to end up spending the money regardless of what they say they’re going to do with it.”

I feel a bit insulted by this comment! Mr. Wyss is saying that no matter how smart we think we are, our instinctual drive to consume will trump our intelligence. For my part, the rebate check will be going directly to debt payment. This will (if all goes to plan) more than double my monthly payment to the credit card company, and will result in my credit card debt disappearing a full month sooner than expected! Now THAT is smart, and no amount of advertising or consumption lust will convince me to spend that money on items I don't need, which were probably produced overseas, anyway.

If you haven't decided how to spend that rebate check, here are some ideas to consider:

How about buying yourself some freedom? Freedom from debt, that is. Do you carry a credit card balance? Have you been ignoring it, paying the minimums month after month? Why not pay it down (or off)? Consider the satisfaction you'll feel as you watch your balance shrink, along with your minimum monthly payment.

Split the rebate. Are you a family of four? Are you receiving $1200? How about dividing that by the number of family members and allocating the money this way: $300 to debt repayment; $300 to retirement savings or emergency fund; $300 to the upcoming camping trip; and $300 toward that new TV or other purchase.

If you purchase, buy American! If you decide the use the rebate check to buy something fun (or necessary), make sure you're purchasing something that was made in America! I know, I know, this is almost impossible these days, especially in the case of electronics or appliances. However, the only way the rebate will serve its true purpose (to improve the American economy) is to buy items made by Americans. An alternative to buying a thing would be to travel domestically---this also benefits Americans.

So, I'd like to know: what are YOU going to do with your rebate check?

What are you going to do with your rebate check?

Although I know, as a good American, I'm supposed to go out and spend my rebate check on shoes and other nonessential items, I also know that my rebate check is going directly into my debt repayment.

I found this great little calculator on fivecentnickel's website, which supposedly will tell you how much you can expect to receive when the rebate gets into your hot little hands. . . .