We got our stimulus check today! But what should we do with it?
A lot of Americans are asking themselves this same question right now. According to the Treasury Department, 80 million US taxpayers should be expecting their stimulus check this week via direct deposit. This could range from $1,200 if you're single to $3,400 if you're married with two kids.
This new found money can mean a great deal to families on their path to financial independence. Also, it could provide some much-needed relief just to make it through the month.
Nicole and I are somewhere in between. Our income has decreased significantly this month. My small business revenue is down and Nicole's hours have been cut. We'll be taking our $2,400 and using it to live our typical month of spending, saving, giving and investing.
No, we're not buying a 90″ TV or some hot stocks. During this time of uncertainty, it feels more comfortable to just stick with our plan.
Wondering what you should do with your check? Here are some options to consider based on your current financial situation.
1. Spend It
A lot of Americans are going to find themselves needing this stimulus check money to just get by this month. With hours cut, workers on furlough or laid off, this money will help us buy groceries, pay for our housing, cover our utilities and have a little fun with our family.
Who should consider this?
- Workers with reduced hours
- Employees on furlough
- Folks who have been laid off or are now unemployed
Recommended resources
- Track your income and expenses on free budgeting tools like Mint or Zeta (for couples)
- Apply for unemployment benefits if you're situation calls for it
2. Save It
Having a little extra money in the bank right now feels great. With uncertainty and uncomfortable breaking news around the corner each day, I love having a healthy emergency fund. You may have a steady income today, but who knows what tomorrow will bring lately.
Who should consider this?
- Families with less than 6 months of expenses saved
- People concerned that their small business revenue will go down in the near future
- Employees who are seeing a downturn in their industry and are concerned about future layoffs
Recommended Resources
- Open a high yield savings account with Ally
- Review the Paycheck Protection Program to see if your small business qualifies for relief
3. Pay Off Debt
This influx of cash may just help you eliminate some nagging debt that has been in your life for too long. Clobbering your high-interest credit card debt is a great place to start.
While you’re at it, contact your credit card provider and ask about getting a lower interest rate during this difficult quarantine season.
Who should consider this?
- Someone with 3-months of emergency savings (the last thing you want to do is go back into debt because you don’t have enough money saved)
- Workers feeling confident in their income over the next couple of months
Recommended Resources
- Join our free Thriving Families Facebook Community and have 750 other families support you on your journey to financial freedom
4. Invest It
The stock market is down from its all-time highs and some people are seeing this as a great time to buy. I agree!
Well, I like buying all the time and sticking to my investing plan but that's a conversation for another day.
Whether you're a new investor or someone who's been at it for a while, buying today will help you grow your portfolio in the long run. Think about investing in tax-advantaged options like a 401k, IRA or HSA first so you can save even more in the long run.
Who should consider this?
- Someone with a healthy emergency fund
- An “essential worker” or someone feeling confident in their income prospects over the next few months
Recommended resources
- Connect with Vanguard or Fidelity for setting up and investing in an IRA (low fees and great options)
- Open an HSA account with Lively to save and invest for future health care costs
- Speak with your employer about your workplace 401k and see if they are still matching contributions during this global pandemic
5. Donate It
There are a lot of our neighbors struggling right now to make ends meet. If you have the means and your situation is comfortable, consider donating your money to trustworthy organizations that will have the most impact.
Who should consider this?
- Families with a stable income and who have a healthy emergency fund
- Parents who have a giving program with their kids – this is a great learning opportunity about the power of giving!
Recommended resources
- Charity Navigator helps you vet organizations you are considering donating to
- Feeding America and Together We Rise are two organizations I’ve personally interviewed that are doing excellent work right now
- My daughter Zoey thinks people should give more to their local animal shelter too (she gave $14 last month and our shelter wrote her a nice thank-you note back!)
6. Give it Away Randomly
We’re in unchartered territory. In my life (even my parent's lifetime), we’ve never been quarantined in our homes with no specific end in sight. People are scared and nervous about what is to come.
Let’s be a beacon of light and hope for people in these scary times. If you are able to give, do it in a fun way and give big.
Find someone in the service industry and give them a big tip for their commitment to service during this difficult time. Think about the UberEats delivery person that brought you food the other day or the grocery store clerk that rang up your items behind a plastic shield. These folks are putting their health on the line right now.
If you're in a blessed financial position, be a blessing.
Who should consider this?
- Similar to above, folks with a stable income and who have a healthy emergency fund
Recommended resources
- A couple of years ago during the holidays, we started a tradition called “Big Tip Tuesday” … I think it’s time to revive it this month!
What are you going to do with your stimulus check?
Please let me know in the comments below.
