Get a big bang from your tax rebateAlready making plans for how you’ll spend your tax rebate check from the federal government? The first economic stimulus checks are due to arrive in early May.
By: By Shirley Anderson-Porisch, Extension Educator, The Republican Eagle
By Shirley Anderson-Porisch, Extension Educator
Already making plans for how you’ll spend your tax rebate check from the federal government? The first economic stimulus checks are due to arrive in early May.
Consider some of the following ways to make the very most out of your tax rebate check:
•Open an emergency account. Most Americans do not have money set aside for those financial emergencies that always seem to happen when there is no cash available. The rebate check is a great start or addition to an emergency account. The goal might be to have three to six months of monthly fixed expenses in the account.
•Pay for repairs. Maintaining expensive possessions now will result in dollars saved tomorrow. Use the refund money to repair a leaky roof before it develops into a bigger problem; replace car tires with new, safer ones; or fix home ceilings, walls, floors, doors, or windows.
•Make an extra home mortgage payment. Though you will not feel the benefit immediately, making an extra mortgage payment now puts you one payment ahead and can save you a payment later.
•Fund Your Retirement Account. About 30 percent of all working Americans have no money invested for their retirement. If you are one of them, seriously consider setting up or contributing to an IRA account.
•Open a 529 College Savings Plan. A four-year college education can cost upwards of $100,000. Save for your child’s college education with a 529 plan. It works much like a Roth IRA, and withdrawals are tax-free when used for higher education purposes.
Shirley Anderson-Porisch is a family resource management educator with University of Minnesota Extension.