Sunday, April 27, 2008
By Don Shilling
Choices abound for spending tax rebates
Experts advise putting the money away or paying down debt.
1The problem was that it cost $279. But that little sticking point is about to go away, thanks to Uncle Sam.
“I’ll be back when I get my tax rebate,” the shopper told Angie Lubonovich, assistant buyer at Kegelle’s.
Shoppers often can count on one bonus from the federal government, a refund of taxes that they overpaid the previous year. But this spring, President Bush and Congress are passing out more money in the form of tax rebates in the hopes of stimulating a sagging economy.
The extra payments, which will start arriving this week, amount to up to $600 per adult and $300 per child under 17.
For the shopper at Kegelle’s, pocketing an extra $600 this year means she could buy the white top and a pair of matching white pants from fashion designer Rebecca Taylor. The pants also cost $279.
Of course, spending nearly $600 on one outfit doesn’t tempt every shopper.
Spice Frost, for example, is looking for something to help her navigate.
“I need a GPS for hockey trips,” said the 40-year-old Youngstown resident who has a 7-year-old son in a traveling hockey league.
She and her fiance have been talking about buying a global positioning system but hadn’t been able to spend the money.
“When they came out with the rebate, I said, ‘That’s it. We have to do it,’” Frost said.
Others say that they don’t have the luxury of a shopping spree because of the rising cost of gasoline, utilities and food.
“The first thing I will do is pay bills,” said Lois Suber, 44, of Struthers. “You can’t go out and splurge because you have bills.”
Joe Pavlansky, 27, of Campbell, said he doesn’t expect his $600 to go far. “I’ll probably pay bills and buy gas,” he said.
For those that want to spend, however, there are plenty of choices.
At Special Tee in Boardman, a set of TaylorMade R7 golf irons offer the user more than just good looks. They promise “optimal forgiveness, accuracy and distance.” And they are priced right for the tax rebate, $599.
Other shoppers may prefer to rock. Guitar Center in Boardman has a whole wall of electric guitars, including a Dean model for $599.
Some shoppers may feel, however, that spending their rebates on fancy clothes, golf clubs or guitars is frivolous. Perhaps an upgrade of home and yard equipment would be the better use for the rebates.
In the kitchen, a combination convection and microwave oven that sits over the range costs $599 at Home Depot in Boardman. Convection ovens offer more even browning and faster roasting, which can seal in the juices of meat.
For the yard, the home improvement store has a Honda mower for $599 that has four cutting options (mulching, bagging, discharging and leaf shredding), plus an automatic choke for easier starting.
Or, a shopper may prefer a 750-square inch grill, which cast iron grates, electronic ignition, three stainless steel burners and a side burner. The Char-Broil model costs $599.
A married couple could set sights higher because they will receive $1,200. One option would be a new patio sliding door. A wood door from Andersen costs $999, but the price rises to $1,289 with the hardware and screen. Installation is an additional $349.
That total is a bit more than $1,200, but if the couple has a child, they will be pocketing another $300 rebate.
Some parents, however, may feel the child should share in the bounty. If that’s the case, how about a motorized tractor for the little one? The toy ride comes with a canopy, trailer, adjustable seats with seat belts and a horn. The cost at Toys “R” Us is $349.
President Bush, who pushed the tax rebates through Congress, will be happy with any of these choices. He just wants Americans to spend the money. He says they can help stave off a recession by spending the $152 billion in rebates so that the money is recirculated into the economy.
Some say, however, that Bush’s plan isn’t the best option for everyone.
The Ohio Society of Certified Public Accountants said the best of use the rebates, as well as tax refunds, is to set up a savings and investment strategy.
Think twice before cashing the checks, the group says. Instead of buying what you want now, it may be better to think of the future.
At the top of the group’s recommendations is paying down credit card debt. With interest rates on credit cards averaging about 13 percent, paying off debt sooner saves on interest, it said.
Other suggestions are opening a retirement account, saving for college and starting an emergency fund.
But no one ever said that an emergency fund is a girl’s best friend. And as chance would have it, King’s Jewelry in the Southern Park Mall has half-carat diamond stud earrings for $599.
shilling@vindy.com