Retailers are calling on consumers to come out of financial hibernation and spend, spend, spend to help save jobs. Retailers hope that Prime Minister Kevin Rudd's $42 billion stimulus package to almost nine million Australian families and workers will be spent at the local electronics shop or fashion boutique, rather than thrown down the pokies or used to pay back credit card debts.

Single-income families and those earning less than $80,000 stand in line to receive $900, while people on incomes of between $80,000 and $90,000 will receive $600, and those earning between $90,000 and $100,000 will get a $250 bonus.

Anyone receiving Family Tax Benefit Part A with a child aged between four and 18 years will get a $900 back-to-school bonus. And more than 400,000 students and people returning to study will get a $900 training and learning bonus.

It’s raining money.

Australian Retailers Association director Richard Evans said low petrol prices, reductions in interest rates and the federal government's $10.4 billion stimulus package had contributed to a 0.2 per cent rise in retail sales in January. "We're cashed up...most Australians are doing quite well right now...they are financially hibernating though," Mr Evans told ABC Television.

"And what we're trying to say to them is now's the time to start coming out of that hibernation and start re-entering the market place.

"If they start spending the money again they are likely to save their job."

With many Australians facing the prospect of losing their job, blowing money on an imported watch or handbag is probably not the most sensible strategy, especially as we stand in the wake of the biggest global meltdown since the Great Depression.

So if you are encouraged to spend it, rather than save it, FatCat has come up with 5 thrify options for spending your windfall.

1.    Pay down debt

If you have an out-of-control credit card or personal loan, or if you are mortgaged to the hilt, use whatever spare money you have to pay down debt. It’s important to pay down as much debt as possible and to keep on top of bills.

Think of it this way. If you are paying interest on your credit card at 18 per cent or more, you need to channel the equivalent money into an investment earning 18 per cent just to break even. In this environment, earning an 18 per cent return on your money is about as easy as picking the winning ball in Tattslotto. So unless you pay off your credit card in full each month, every purchase you make on it is as much as 18% more costly. Think about it, would you buy a shirt if the salesperson said, "just for you, I'm adding an 18% markup on it?"  Unless you meet your credit card payments, you're effectively adding a surcharge onto every purchase. 

And finally, you don't want overdue credit cards or bill payments to impact your credit rating.

2.    Save and keep investing

It’s critical that you shovel some money away as the future is uncertain. Unemployment is rising with some economic commentators anticipating that it could hit 8 per cent. If you did lose your job, do you have enough stashed away to cover your lifestyle expenses and debts?

It’s not easy for super fund investors to keep adding savings to a dwindling super account, but now is certainly not the time to pare back your retirement planning. Since super is a long-term investment, buying cheap stocks now could be one thing that catapults your retirement savings over the long haul.

3.    Pay for financial advice

Now is a good time to get financial advice; it’s definitely not the time to be sacking your adviser. Stocks, property, super funds, cash rates have all hit rock bottom so it’s important that you get advice on how to protect what you’ve got, but also ways to recoup money over the long term.

4. Pay for things you could do yourself

When evaluating your expenses, a handy tip is to single out costs that you can eliminate by doing it yourself. Cleaning, child care, personal fitness trainers, golf lessons – do you really need to be paying all of this money out?

There is little point sacking everyone, however. If having a cleaner once a week provides order in an otherwise chaotic week, then make room in the budget for it. Spending your weekends cleaning your house mightn’t be the best use of your time.

5. Pay for little indulgences

Cutting back every indulgence in life can be completely miserable. It’s therefore important to find more economical ways to enjoy yourself. If you deprive yourself too much you are at risk of blowing your savings on an impulse spending spree.

Go out for breakfast rather than dinner; meet friends for coffee. A coffee isn't going to break the bank.

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