Many consumers spend early rebates on soaring cost of living

The rest went fast: $350 for a son's eighth-grade class trip to Washington, D.C., $345 for an end-of-winter balloon payment on their heating bill, $225 for a daughter's water-damaged cellphone and bill, $100 for their 15-year-old son's savings account and $60 on transit passes. Another $600 is expected later — her husband filed separately — and living costs are likely to gobble up the bulk of that, too.

Church, who describes herself on a networking website as "a certifiable, bona fide bibliophile and the proud owner of over 5,000 books," might have liked to make a few additions to her library or spend something on herself. Not at times like this, she can't. But she's not complaining about a payment she sees as a blessing.

"I don't know how it affected other people's budgets overall, but it helped our money stretch," she said.

"I thought it was a really cool thing. It made me see my president in a different light. I was like, 'Attaboy George!' I can be swayed, I can be bought!"

The rebate couldn't have come at a more perfect time for Dobbins and her fiance: just when payments for their wedding were coming due. Every penny was devoted to the big event, which will have cost about $24,000 by the time all the bills have been settled.

"When I learned about the tax payment I was thrilled," said Dobbins, an account supervisor for a marketing firm in Washington, D.C. "I immediately factored that into what we would be able to pay off."

The fact that the entire amount was consumed by food inflation, in the form of their caterer's price hike, was appropriately ironic given the backdrop to today's economic malaise.

"Do I think it accomplished what they wanted?" Dobbins said of the rebate. "No, because it's going into people's gas tanks, into their food bills or to pay off their credit cards. The cost of living is going up so fast that it's really not going into the stores. It's just keeping up with everyday costs."

'It's a constant battle'

The most troubling economic indicator to Houck this year has been the cash flow predictor in his Microsoft Money software, showing his finances going "down, down, down, down, down." So when the $600 rebate appeared in his bank account, it allowed the 24-year-old to splurge a little for the first time in months.

Splurging is relative for an actor-for-hire doing everything from carpentry to backstage lighting work to video game bug-testing in order to pay the rent.

Besides $30 on tickets to see a play a friend was in, his big "fun" purchase was the Wii game — "Super Smash Bros. Brawl." He allowed those indulgences only after spending $245 on new head shots to get his face and name out to directors, $68 to renew his subscription to an acting submission service, and most of the rest on food, gas, laundry and bills.

"I don't think I helped save the economy with my contributions from the rebate, but it worked well for me," said Houck.

Angela Anderson, 50, of York, Pa., thought for weeks about how she might spend her tax rebate. She could create a gas account for the increased cost of her 54-mile daily commute, pay off credit-card debt, buy a piece of local original art, put some toward a trip to Europe, and maybe use anything left over to treat herself with a massage and manicure.

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