Frugal | The Great Economic Stimulus Rebate Debate

46 Responses to “The Great Economic Stimulus Rebate Debate”

1. Rebecca Rivera on March 31st, 2008 4:46 am

   Hi! I am a single mom with two boys. I do not have any debt, but certaintly could add the stimulus mney to my savings. This would be the responsible thing to do. But I am using the money to rent a car for the week and go viaiti my elderly grandparents in Ohio. They have a cabin on the lake that they go to every summer. I have not been there since about 2001 or 2002. They will probably not be able to go to the cabin anymore after this year for bad health. So this is ort of a vaction for us. I am excited as I miss them. I guess I am stimulating the economy by renting a car and buying extra gas.

2. Her Money on March 31st, 2008 4:49 am

   While I don’t know how much you expecting back for your rebate it seems you might be able to compromise and do both. Put half of it towards your debt and savings and also take a vacation. Consider a smaller vacation, maybe a three day weekend to somewhere not too far away that you can drive to and get a decently priced hotel. Or, you could consider doing some activities that are close to home that you could do as a family that you might not otherwise do. A couple day trips even.

3. Sick of Debt on March 31st, 2008 5:01 am

   I second the vote for half and half. In addition, doing anything with the money besides stashing it in a ziplock bag is putting the money back into the economy. What do you think businesses that receive a big inflow of money from debt payments do with it? They use it in the marketplace to get more money!

4. Sara on March 31st, 2008 5:03 am

   With our tax ‘refund’ and soon with the future stimulus rebate my husband and I paid off our van, bought new windows for the house (he can install himself so it wasn’t as expensive as it sounds), bumped the emergency fund back up and there was still money left over for my husband to spend money on pricy but quality camping gear for this summer.
   So I guess we did a little of everything? Is there a way to do some of each? Meet the financial goal that been pressing on you the most and use the rest to go on vacation? I guess I’d be more relaxed and in a vacationing mood if I knew I had just gotten Citibank off my back… so maybe there’s a win-win way to split it up. Good luck!

5. Ron@TheWisdomJournal on March 31st, 2008 6:12 am

   I think it’s important to recognize what is important to your spouse and to work together to see if you can pull off doing both.

   I bet you could find some very frugal ways to take a vacation! We’re using my hotel points to stay for free on our vacation. Food is a given, and the only thing that we’ll be out is the adventures we choose and the souvenirs we buy.

6. Carrie on March 31st, 2008 6:55 am

   Lynnae, I was just in a chapter in my accounting class that talked about how people who take vacations are less likely to get burned out and stuff. So if hubs thinks a vacation is in order I’d go for it. Then you can get back on the frugal boat

7. fathersez on March 31st, 2008 7:00 am

   Ron is wise. I fully second him. Take a break and have a good time. You and your family well deserve it.

8. Damsel on March 31st, 2008 7:04 am

   I agree with the compromising plan… Maybe even just getting a fancy hotel for a couple of nights would be good. Send the rest to debt.

9. Susan Flemming on March 31st, 2008 7:05 am

   If your husband is feeling physically and emotionally burnt out and stressed from the past year… perhaps the most frugal thing you can do is take that vacation. It would allow both of you to relax, refresh and rejuvenate.

   When we don’t take time to destress, we risk compromising the ability of our bodies and minds to cope with the demands of daily life. Our bodies oft times will then force down time on us by getting sick. And that would put you further behind financially.

10. Frugal Dad on March 31st, 2008 7:25 am

    Being the great compromiser that I am, I would probably find a way to do both. Maybe take a mini-vacation, and apply the rest to the “evil Citibank card.” That way you are that much closer to paying it off, and you will come back from your vacation refreshed, and more productive.

11. mark on March 31st, 2008 7:31 am

    It sounds like you have a strong family business plan established (e.g. savings, debt reduction, frugal living, etc.). If you didn’t my suggestion would be to get started. However, since you have a good plan in place that is working, this seems like an excellent opportunity to take some extra family time without undermining your existing budget. Hey….it’s your money that the IRS is just giving back to you. Enjoy!

12. Libby on March 31st, 2008 7:42 am

    I agree with the wise folks here! Maybe send half to debt or emergency fund and the other half to a nice long weekend away. If you rent a condo or a cabin within driving distance you can even eat breakfasts in, pack lunches for your day out and then treat yourself to dinners on the town and fun things during the day.

    I thought Ron’s commnet was so smart about listening to your spouse’s needs. IMO, that goes such a long way to making the other person feel valued and heard and gives he or she momentum for the life ahead!

13. Libby on March 31st, 2008 7:43 am

    I agree with the wise folks here! Maybe send half to debt or emergency fund and the other half to a nice long weekend away. If you rent a condo or a cabin within driving distance you can even eat breakfasts in, pack lunches for your day out and then treat yourself to dinners on the town and fun things during the day.

    I thought Ron’s comment was so smart about listening to your spouse’s needs. IMO, that goes such a long way to making the other person feel valued and heard and gives he or she momentum for the life ahead!

14. sha on March 31st, 2008 7:45 am

    Sometimes it is much LESS stressful to take the harder road up front. If he thinks he is tired now, try another round of the same. Having an emergency fund helps avoid repeating the same.

    MORE importantly - you need to understand what this tax rebate actually is. Unlike what most people think it is NOT free money unless you are in the lowest bracket. Otherwise, this is an advance on next years taxes. Check your situation carefully!

15. sarah on March 31st, 2008 7:59 am

    I can really relate to your husband’s point of view. I’m definitely the spender in my marriage. It’s so easy to spend the stimulus money on something you want to have or to do… after all it’s “free money…” totally unexpected, out of the normal budget, and kind of a windfall.

    I just feel, though, that if we use the money for anything but paying down debt, we’re setting ourselves up for a lot more “excuses” down the road. I don’t want to give in until I can really afford it. Otherwise before you know it we are treating more of the additional income that way and getting out of debt slower and slower instead of faster and faster. So, we’re putting the money on the credit cards the day it comes in.

    If I were you, I think we could maybe justify setting up a category in the budget that will save up vacation money in a vacation savings account for a few or several months out of the regular income. I think saving slowly is always the way to go, or at least scrimping on something you’d normally get (like cutting the grocery or entertainment budget for a few months to squeeze out extra money). This way you really feel like you EARNED the treat or vacation. I think you also spend the money differently as well this way (more wisely, because you worked hard for it) and enjoy it more.

16. Alison @ This Wasn't In The Plan on March 31st, 2008 8:01 am

    Since you and your husband both want such different things, I think it’s important to compromise and do a little bit of both - it will be beneficial to your relationship if each partner feels valued. You can probably take a nice little vacation without using the entire amount and then put the rest towards your financial goals.

17. boomeyers on March 31st, 2008 8:09 am

    We have been having this same debate. He wants to blow it all on a big vacation (which vacations are a BIG reason why we are so far in debt!!) and I want to contribute to 529’s for all the kids. I think we will contribute MOST of the money to the 529’s and use a LITTLE bit for a SMALL weekend vacation to the lake (which was where we were going to go anyway, but this way it will all be paid for in advance.)

18. No Debt Plan on March 31st, 2008 8:22 am

    I would split it … but maybe not 50/50. It depends on how far along you are with the emergency fund and savings. If you are fairly far along, then maybe a 75/25 split with 75% for vacation.

    Keep the marriage union a happy place. Vacation might be good for everyone. But, if you are just getting into the real savings then I would say let’s be responsible, and save up for a vacation like we would otherwise.

    Then again, it only does the economy any good when you spend it

19. Kathy on March 31st, 2008 8:56 am

    I would want to save/pay off debt. It’s the responsible thing to do. My husband would want to spend it. Is there a way short of a vacation for your husband to rest and feel rejuvenated? I’d feel better at not having debt, but it doesn’t sound like he’s wired that way. But then, I personally prefer to vacation at home. To me, going anywhere involves a lot of extra work — packing all of the clothes, diapers, bed stuff, toys and books to last however long; then unpacking it when we get there, then repeating that process when we leave. Plus I still have to do all the same work that I do at the house when we’re gone, unless we stay in a hotel and eat out all the time. It’s not really that relaxing. The long-term goal for you is to pay off debt. When you’re debt-free, and have an emergency fund, then your husband can be not quite so anxious about stuff, and perhaps actually work less, and then won’t feel like he needs a vacation!

20. Danielle on March 31st, 2008 9:01 am

    I agree with everyone else–split the money. It doesn’t have to be 50/50, but if DH is feeling like he needs a vacation (you said it yourself, he worked insane hours no one should have to work), he’s communicating to you that his batteries need to be recharged.

    But like everyone else said–find ways to save on the vacation. Do any friends have a cabin or lake house? Can you house swap with any friends? Or even consider a bed & breakfast. Pack your own snacks and drinks.

    Good luck deciding!

21. MichelleH on March 31st, 2008 9:02 am

    Hey Lynnae,
    I’d probably just compromise too. However, if you opt for the vacation and want to come this far - yall can stay with us for free! We have 2 extra rooms.
    Blessings!

22. MichelleH on March 31st, 2008 9:03 am

    Hey Lynnae,
    I’d probably just compromise too. However, if you opt for the vacation and want to come this far (Texas) - yall can stay with us for free! We have 2 extra rooms.
    Blessings!

23. FFB on March 31st, 2008 9:18 am

    If you can take a frugal vacation then go for it. You’ll have family time and some space to re-charge the mental batteries.

    I used to not go on vacation because of how expensive they were. Now I realize I’ve missed out on a lot of experiences. We treasure our yearly vacation and make sure we have enough to cover it each year.

24. Alethea on March 31st, 2008 9:20 am

    I am in the same situation as you. My husband is the spender and I am the saver. We have agreed to a compromise. We are splitting our stimulus payment in thirds. One third to savings, one third to debt, and one third to whatever we’d like to spend it on (most likely put towards our vacation). We have found through experience that it’s a lot easier to continue to save and pay down debt if we allow ourselves to have a little fun (within reason) every now and then.

25. Kacie on March 31st, 2008 10:25 am

    Sounds like you should go on a little vacation!

    You guys can have quite a bit of fun on $1,000 or so, and throw the rest at debt or savings.

    As Americans, we really don’t take vacations/time off like we should. It’s important for our health and sanity.

    Be sure to let us know what you plan to do!

26. Shana on March 31st, 2008 11:12 am

    I agree that it’s best to try and do both. Though, if the desired vacation takes all the money, I say take the vacation. While you’re being very frugal with the rest of your income, you don’t want your husband to resent that things like vacations can’t be worked into the budget (sort of like eating in restaurants occasionally ). And especially if you two didn’t have a proper vacation last year, and he’s been working crazy hours, a vacation is definitely called for. I’ve experienced burn out from working too much, and it’s not pleasant. It’s especially not pleasant when you get to the point that a 2-week vacation is not enough to recharge yourself. Having that happen was scary, though learning my limits was a useful (though very expensive emotionally) lesson.

27. Kandy on March 31st, 2008 11:29 am

    Like you, we’ll be getting a rebate back for two children (my ex gets to claim Katie *mumble grumble)…we’re going to put half towards debt and take half and splurge on something fun for the family…we’ve had a rough past year as well and need a break…we’re going to take a fun weekend at a water park on the coast…

28. Janelle on March 31st, 2008 11:29 am

    We have the same dilema here. We decided to comprimise. We are taking a two-day stint at Great Wolf Lodge (near us so travel expense is minimal), and using the rest on debt.

    KOA’s are cheap and the cabins are cool to stay in! Maybe you can put a couple hundred in savings and then use the rest for some R & R. I am loving getting out of debt, but I also understand the need to make memories with your family. Sometimes a bit of balance is in order.

29. Stephanie Chance on March 31st, 2008 12:39 pm

    Definately take the vacation. It will save you tons of money in medical bills by alleviating some stress. We are in a similar situation. We have some debt that I would like to pay off, but my husband has such a stressful job, that it is well worth it to take some of the strain off of him, and consequently, our relationship. If we were to just pay down debt and he continues to work at the same pace, he may get sick and miss work which may cost us money in overtime pay, and it would probably even out to be like we never got the money to begin with.

30. paidtwice on March 31st, 2008 1:22 pm

    If it were me - and it sort of is me since we are having similar discussions - I think I would try and look objectively at what the long term potential consequences of all the actions you could take are. Where is your emergency fund at? Could it weather an emergency now? What is the debt situation like and what is it costing you? How badly do you need a vacation and how frugally can it be done?

    And hopefully through that, you can find a point where everything is balanced and makes the most sense for you. It depends on how much of a burden the debt is on you I think, and also how much you need unwinding. And how comfortable you feel with the emergency fund as it is and how all those things play into each other.

31. ammb on March 31st, 2008 1:52 pm

    Normally, I’d say save & reduce; however, after the crazy stressful year, I say: Split the difference between the 2 if possible; if not, take the vacation

    ‘San-check’ aka: vacation is far more critical to your family (esp. the sole breadwinner!) after such a stressful year than stuffing the ER fund or paying down the debt with such a (relatively) small amount. It’s also far more recharging & rewarding over both the short & long term. It will also allow your family to easily bear the ongoing burden of debt reduction without becoming prey to frustration, resentment & burnout.

32. southern on March 31st, 2008 2:41 pm

    I would encourage you to listen to him and understand what he is saying out loud. We worked 6 years getting up at 3:30 every morning delivering the papers. It wore us out physically and mentally. He has been on a roller coaster of fear of providing and hard work and is saying he needs a break and to spend some good quality time away. But, I would say to try to do something that balances out the cost and see if you can vacation cheaply instead of spending everything so that you have something to put towards building your financial future.

    Ha, I started commenting before reading the others and just stopped to read them. Looks like the consensus us to do both! My best friend’s husband has lukemia. He is 40 years old. He always wanted to hike the Appalacian trail but was too busy. He has hiked a week twice a year for the last 3 years. It was not really in their budget. It was a dream that they realized was worth sacrificing for once the disease put their lives in perspective. He may not make it to the end of the trail but can say that he did not put off life for a big bank account. Leaving them taken care of is important, but not more important than living a happy fulfilled life. Balance. That is the key.

33. Mrs. Micah on March 31st, 2008 6:06 pm

    We don’t like vacations…it’s actually a good match. But thinking in terms of if you were my parents, who do like to get away, then I’d evaluate what you as a family like to do and what you can do with the rebate.

    Then plan a frugal vacation (# of days depending on planned amount) with a certain portion put into savings.

    I feel very much like you do, but after all Jim’s been through I think it’d be great for him to get away.

34. Kim on March 31st, 2008 7:14 pm

    When my aunt and uncle died years ago, it was discovered that they had quite a bit of money stashed away, much to everyone’s surprise. The reason for everyone’s surprise was that they lived so modestly, yet seemed so happy, all of their years together (almost 50). I was in my early thirties at the time, and couldn’t understand this…why hadn’t they spent some of the hundreds of thousands of dollars they had saved on some new furniture, or a new car…or a vacation. I remember commenting to my oldest sister that they should have taken a vacation once in awhile, and she said to me that having money in the bank as security and zero debt is like a permanent vacation, what could be better than that. That comment really sunk in to me at the time…a time when I was stressed out every single day about debt and how I was going to have enough money to make ends meet. I say save the money or use it to pay down debt, at least the majority of it. You will be less stressed and happier in the long run.

35. Heather on March 31st, 2008 8:34 pm

    I definitely think add money to your emergency fund and get it up to at least $1000 then maybe take a mini vacation.

    Sometimes we gottat take a break and just get away, and get refreshed.

36. deepali on April 1st, 2008 11:27 am

    Tough call. I suppose there are two ways of looking at this: 10 years from now, which would you have preferred you did? Or conversely, if you were going to die the day after the decision, which would you rather have made your last act? Both a bit dramatic, but it’s a rather effective decision-making tool!

37. sara - pensioncomparison.com on April 1st, 2008 11:58 am

    Could you not have an inexpensive vacation, like camping and then still top up the emergency fund?

38. Lee on April 1st, 2008 2:45 pm

    I’d say whatever would make both of you happier. Your family has been through alot this year, take the vacation. Also, since you’ve had to be frugal all year because of circumstances and having to pay taxes, I think both of you need the time off and time away to feel less stressed and enjoy yourselves. There will be time to be frugal and save up for emergencies when you come back from vacation. I’d say go for it…how often do you get the chance, and money all a once to splurge? For the good of the family and your husband, as well as special time together, you need to go relax somewhere…don’t even think of being frugal while you’re gone, either! Just have fun.

39. Ginny on April 1st, 2008 5:51 pm

    We are not in a situation financially to take a vacation at this point. To be honest, if we were I think I’d take it. You have to also live your life, otherwise saving money & being debt free won’t mean much.

40. Lynn on May 22nd, 2008 1:51 pm

    I did not receive the amount I was expecting. I am happy to be receiving this extra money. My plan was to put it into my savings along with my tax refund I had saved since January. ON MY SOAPBOX: I am a bit upset though. My money will not be used as disposable income. Instead, it’s going out to pay the for THE INCREASING COST OF GAS, AND FOOD, and bills. I have receiveD a letter from the electric company increasing cost by 10 to 15%. There is an fee now to have city to pick up bags of leaves from my yard, a new sewer fee has been added for city residents, and my insurance has increased because of the new PIP requiredment. I don’t understand how the government thinks the little money given would anything. It’s straight from my hands directly into their hands (bills), gas, and food. I hear people are stealing gas from cars. You would think to judge them, however, people are going to do what ever they can to survive. You see it on the news how some people are suffering financially. The government needs to do something!

41. Lynn on May 22nd, 2008 2:00 pm

    Sorry. I didn’t answer your question. I think you should save it for a rainy day. With how things are going with the economy, you might need some extra funding later. If not a concern, then use it to pay off any debt—pay debt off. It’s nothing like being debt-free only having to pay basic utilities, food, insurance, etc.

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