Here’s 10 suggestions from experts for smart ways to spend the windfall from Uncle Sam’s economic stimulus package.
1. Pay down the balance on credit cards, starting with the one with the highest interest rate.
2. Establish an emergency savings fund. Experts suggest three to six months’ living expenses, but everything helps. Keep the money in an interest-bearing savings account.
3. Add the rebate to your next mortgage payment, which will build up equity in your home and reduce the amount of interest you pay over the life of the loan.
4. Pay for monthly recurring expenses, such as child care, prescriptions, insurance premiums, student loan payments or rent.
5. Repair nagging house problems that will only get worse, such as plumbing leaks or termite infestation.
6. Use the rebate to pay for utility bills — cable, heating, electric or telephone. Don’t be in the position of having to use a credit card to pay for heating bills.
7. Pay down medical debt.
8. Purchase several months’ worth of supplies you use frequently, such as household cleaning products, paper products, frozen food, pet food or diapers.
9. Spend to keep your car in tiptop shape.
10. Add it to a child’s college fund.
See related stories: “Will you really use economic stimulus money to pay off debt?,” “10 wacky ways to spend economic stimulus windfall.”
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