Here are 7 ways to put your stimulus check to good use!
- Pay Any Late Bills
- Stock up on Food Storage
- Put it towards your Emergency Fund
- Max out your 2020 or 2021 IRA
- Pay on High Interest Debt/Loans
- Invest it for the long haul
- Donate it to a charity or someone/place in need.
So, the massive $1.9 trillion stimulus package has finally signed into law! The common question is what should you do with your stimulus check once you get it?
Well, with the new stimulus package, a single individual needs to make less than $80,000 or a couple needs to make less than $160,000 annually to be eligible. If you make less than that, you will receive a payment of $1,400 per person. A couple would get $2,800, and an additional $1,400 for each child. Meaning a family of four would get $5,600 dollars and a family of 6 would receive $8,400. The more kids you have the more money you get!
Some people have already received their checks, so if you haven’t already gotten yours, it should be coming through any day now. It will be faster if you have direct deposit already set up when you filed your taxes. If that is not the case, it will be mailed to you via a check or a prepaid debt card.
When you do receive your stimulus check, it is important to make smart financial decisions before just going on a spending spree. If you’ve been struggling to make ends meet, it would be best to put the money to good use and spend it wisely. You want to make sure that your basic needs are met. If you have any outstanding bills you need to cover or maybe you are behind on rent those would be the best place to spend your check.
It is always a good idea to have some type of food storage. In fact, you should always have enough food to get you through 3 weeks in case of a natural disaster or emergency. If you don’t have any food stored up, consider purchasing some nonperishable food to cover those bases of emergency preparedness.
If you are in good standing with bills, rent and groceries, consider using a portion of the check to pay off high interest debt and then work on building up your emergency fund. Remember, you want your emergency fund to be able to cover 6 months of necessities.
If you do not have any debt and a solid emergency fund established, then you should look at investing the money for the long haul. Did you Max out your individual retirement account for 2020? You still have still have time to do that, the deadline was just extended to May 17, 2021. The maximum you can invest is $6,000 for 2020. If you already hit that, you can always start putting that money towards your 2021 IRA contribution limits.
I talked with one individual who was adamant that he did not want the stimulus check. But he didn’t know what to do with it instead of keeping it. He was clear that he did not need it for himself or his family. If you have a similar mindset and do not physically need the stimulus check, look at ways to distribute that to people that really need it. You can always donate it to a charity, a non-profit organization, or a local resource, like the food bank or the red cross. Or, maybe someone in your family is not as well off or maybe they lost their job, and they could use it more than you. There is absolutely nothing wrong with helping others in need!
I think the most important thing to do when you get the stimulus check, is to simply have a plan. Just stop for second and really process where you and your family are at finically and where it can do the most good. You do not want to rush in and buy a fancy new car if you are not financially sound. So, make sure that your basic needs are met, you are continuing to live within your needs and then invest it or give it to someone else in need. What goes around comes around!
© EuduringFinances, 2021. All Rights Reserved.
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