Windfall Can Provide a Financial Turning Point.

Debt Diva Offers Suggestions to Feather Your Nest with Your Tax Refund and Economic Stimulus Checks

COLUMBIA, Md. -- Tax refunds will be arriving in your mailbox or directly deposited in your bank account before you know it. An added bonus this year is the government's economic stimulus

disbursement, which can range anywhere from $300 for a single person to $1800 for a family of four (even more for families with additional children, $300 per child). Families across the nation will experience a significant bonus due to their tax refund and stimulus payments this spring.

"A windfall of this proportion provides people with an opportunity to create a financial turning point in their lives," says The Debt Diva, Clarky Davis of CareOne Credit Counseling. "There are variety of great options to consider when deciding how to feather your nest with additional income."

This is a great time to review your current financial situation and figure how best to use your tax refund to provide you with some needed security. First review all outstanding debts, check your credit card balances and write down what you owe each month. Then review your calendar for any upcoming expenses, like car repairs, appliance replacements or home repairs. Now you can decide how to best make your refund and stimulus check work for you.

Pay Down Debt

Paying down credit card debt is the first priority for many people. A significant payment can save you hundreds of dollars in interest fees. You should spend a large portion of a windfall on debt, especially credit cards. You can use your extra cash in a lump sum payment or double your regular monthly payment for several months. If you don't have credit cards, lowering any outstanding debt, such as a second mortgage, will help save you money in the long run.

Emergency Funds

A windfall is the perfect opportunity to start your rainy day fund. Many financial experts suggest two to three months worth of living expenses put away for emergencies like medical expenses, major home repairs or a job loss. You can start a fund, feathering your nest with a portion of your rebate and continue to put a modest amount away each month. Something as simple as an unexpected car repair can be a huge financial hit for many Americans. This fund will help protect your finances.

Retirement Funds

Open an individual retirement account with some of your money or add it to an existing account. This will allow for a solid nest egg when you retire.

Invest in Yourself

Strengthen your physical health by taking preventative action. Schedule any overdue medical exams - annual physical, dental cleaning, eye exams or medical procedures you have put off. You'll save in the long run if you take care of your mind and body as you age.

Savings

If you are already debt-free now is a great to invest in the stock market since prices are low. Stocks produce nice returns and even as little as a hundred dollars can get you off to a good start.

Splurge

The stimulus is designed to encourage you to spend the money and help the economy thrive. You could plan to spend at least 10% of the windfall on something fun for your family. By limiting the amount you spend, you will still have money left over to pay down debt or invest in your future.

For more information on the economic stimulus package, go to http://www.irs.gov/index.html. You can see an estimate of exactly how much you will receive and when your check will arrive.

Davis offers these and many more tips at her website, TheDebtDiva.com. The Debt Diva's Financial Guide is available as a free download at http://www.thedebtdiva.com. The site is a resource for financial planning. It includes the Debt Diva blog with tips, a Straight Talk community discussion forum and links to a variety of debt management services provided by CareOne.

About The Debt Diva

Clarky Davis has more than five years of experience in the debt management industry and more than 10 years of hard-won personal experience with credit cards and debit cards. The money saving tips the Debt Diva offers have all been tested and proven by the Diva herself. Davis now offers these hard-won insights to others seeking to maximize their tight budgets and deal with debt. She received her counselor certification from the Institute for Financial Counseling.

About CareOne Services

CareOne Credit Counseling is the industry's leading debt management program provider, linking consumers together with agencies that provide customized solutions, 24-hour account access, electronic payment options, strict privacy controls, and ongoing support and counseling.