If you used direct deposit on your 2007  income tax, you probably got your tax rebate last week.  Otherwise, you can expect to get your check in the mail by July.  (See Who Gets Their Rebate First? to find out when you can expect to get your rebate).  You probably have gotten anywhere from $300 to $1800.  What should you do with all that extra money?

The government wants you to use it to stimulate the economy, i.e. blow it on clothes, electronics, etc.  That may not be the smartest thing, especially if you have debt or no savings or both.

My suggestion: put at least 40% of it toward debt/bills, 30% of it in savings, donate 10%, and blow the last 20%.  That way, you take care of your financial needs and wants.  Of course, you can tweak the percentages if you need to, but you get the jist – put most of the money toward savings and debt.

Now, you know your financial situation better than I do, so if you need to put all the money toward your debt or all of it in savings (especially if you don’t have an emergency fund) do it.  Or, if your debt’s already paid off, you have an emergency fund and a healthy savings, you’re in a better position to  spend the money how you wish.