A Few Responsible Ways How to Spend your Tax Rebate

In only a few weeks, we'll all be seeing a rebate check back from the government as part of their economic stimulus package. They are hoping that we will spend that money as quickly as we get it in hopes that all that spending will give our economy a jolt. The government wants us to spend those $600 checks on clothes, TV's and other items being sold. There is nothing saying that you can spend that rebate wisely. Say, perhaps, on paying down credit card bills.

What will you be using your rebate check for? An extra six hundred bucks in free money could go a long way if spent wisely. That new flat screen television you always wanted would look really nice in your living room but improving your credit score would look much better. Here are a few smart ways you can put your rebate check to good responsible financial use:

Begin an emergency fund - You remember how your parents used to always tell you to save your money for a rainy day when you may need it? Well, it turns out mom and dad weren't too far off with their advice. Having a lump of money in an account to use during a financial emergency or crisis can help out tremendously by allowing you to keep your credit card in your wallet. Most debts are due to unexpected circumstances and that money you put away can give you some added protection from it.

Work on past due credit card bills - Is there anything more annoying than those endless streams of phone calls from debt collectors looking for money? Guess what. Ignoring those calls doesn't mean they will go away. It tends to make things worse. Put together a plan on paying off some of those credit card bills with that tax rebate. Your credit score will begin to improve and so will your peace of mind.

Try to pay on credit card balances - Ok. Let's say for this situation that you are currently caught up on all of your bills and you already have a nice emergency fund saved up. What should you do with your tax rebate? Try making paying a little extra on your next credit card bill to help bring the balance down. You'll notice a little extra cash in your wallet and some extra points on your credit score.

Pay an extra payment on a loan - Now that you have a little extra money coming to you, one smart way to use it is make an extra payment or two on a few of your loans. It can be used on your mortgage, car loan, or even that student loan. Think of it this way: Every time you make an extra payment, the quicker you can completely pay off that loan and rid yourself of that bill. You'll also save paying on interest which leaves you paying less in total in the long run.

Treat yourself a little but reasonably - What's the fun of getting some extra spending money and not spending any of it on yourself? No one said you can't. You just need to be responsible about it. Take care of the important stuff first and then buy yourself some with the money left over.