You only get one tax refund and one tax rebate (if you qualify for them). Of course, that makes sense. So why should I point that out?
Because many people get excited when they see they are getting a tax return or any other form of unexpected money. The temptation is to think about everything you can do with it, and it is easy to lose sight of the fact that you only get this money once. Don’t double count your money!
What do you mean – don’t double count your money? What I mean is don’t get carried away planning how you will spend your money. Sure, a $600 rebate sounds like a lot of money. But you only get $600. It’s not $600 you can save, and $600 you can use to repay loans, and $600 you can spend toward a new computer. It is $600. Once.
The same thing goes for your tax refund. Between the two, you may receive several thousand dollars. But be careful not to get carried away thinking about all the ways you can spend this money. You only get to use it once.
Plan how you will spend it. Analyze your financial situation, and determine where the money can be utilized the best way for your situation. You can repay debt, save or invest it, or go blow it on a new toy. Maybe you can do a little of each if you receive a lot of money. The point is, you only get to use this money once, so you need to make the best use of it for your situation.
{ 13 comments… read them below or add one }
I can spend the same money twice? Darn.
We’re definitely going to plan with it, but it’ll probably go straight to the car debt.
Yep… only once! You’d be surprised at how many people look at a small windfall as a giant windfall and get carried away planning how to spend it. Before they know it, it’s gone and they have nothing to show for it.
Killing debt is always a solid plan.
Good point! My husband and I spent last night going over our plan for our tax return which will be deposited tomorrow. We have so many savings goals right now and trying to decide priorities and exactly how much to put where took awhile. We went back and forth on a few points. Having a plan for this money will stop us from spending it twice, or spending it before saving it.
Problem comes when you think about all the things you could do with the cash, and forget that you can actually only do one of them.
This cracks me up. I am frequently reimbursed for business expenses through my employer, and it takes forever. By the time I see the money, I’ve already spent it ten times in my head. (And sometimes twice in reality.) So I’ve set up an ING account for direct deposit of “expected money” and have implemented the rule that I can’t make any more plans. That’s it. The bucks stop there.
Of course, they eventually move on to other uses, but it does put a kibosh on the anticipatory spending issue.
susannah, That’s a great way to handle it!
how do I know if my check will be direct deposit or paper check.
Tracey,
Your rebate check should be given to you by automatic deposit if your information is on file with the IRS, or by paper if it is not. Usually the check will be auto-deposited if that is how you paid your taxes, or received your refund. Even if you paid taxes by check, you may receive an automatic deposit if you gave the IRS your bank info.
I mailed my $1,200 check to my bank for a deposit, but the bank has not received it. It has been twelve days, and I assume the check is lost. How can I ask IRS to void the check and reissue me a new check ??
Frankie,
I’m not sure about that. I would contact the IRS via telephone and ask one of their representatives. They should have the official answer for you. I would expect a delay though. Good luck!
I received a letter stating I would receive payment by May 16. I was finally told my payment was being help up because I filed an amended return, which takes 8-12 weeks to process. So, if you filed an amended return, you may have to to wait.
If my other half owes for childsupport will they take it
Shannon,
If the IRS has it in their system, the odds are very good the stimulus rebate will be taken.