New Financial Plan

With all of the problems the economy has been struggling with there are many plans floating around for a quick fix.  Lately I have been hearing about proposals for new tax rebates.  This got me thinking about how people handle unexpected cash.  What do you do if you unexpectedly get $250?  Government officials and economists hope that the money is spent right back into the economy after it is sent.  That is why they plan to do it.  They have studied the issue, and used this tactic in the past, and many people will spend all of the extra money that they find.

For me the money goes right into the bank and that is that.  We don’t have a strict budget.  If we did, I guess the money would be divided up into a couple of categories.  We do plan our purchases.  We are lucky enough that an extra $250 isn’t a big impact on our situation, so it doesn’t have any effect on our purchases.  I think of it as an extra cushion in our emergency fund.

Companies also use rebates, but they do it to sell products.  They have studied the redemption rates and decide where rebates will drive up sales enough to make more money than the rebates will pay back.  Many times the rebates are not submitted, or not submitted correctly.  People do not follow through with them.  What if you do follow through?  When a rebate check comes in for $50 what do you do with it?  I dump mine in the savings account with my other money.  In my mind that money was already factored in when the purchase was made.

I do have a few places where I will spend that kind of money.  A few years back there were tons of rebates on office supplies and electronics.  At that time I would roll rebates over to buy new products with rebate offers.  It seemed like every few weeks I was cashing rebate checks, buying more stuff, and submitting new forms.  Those types of offers slowly disappeared and I stopped doing that.  The other rebate type money I do spend is credit card rewards.  That is mostly the case because I have cards that give me gift card rewards.  When we get those we start watching for things worth buying at those stores.