It’s likely you got a stimulus check recently from the government to aid in the wake of the COVID-19 outbreak. While having a bit of extra money is nice, you can actually put that money to work and make good use of it. If you make plans of how you’ll use that money, you can get yourself on the right foot for handling more challenges down the road of life.
Perhaps you are out of work as a result of the pandemic. It may be necessary for you to use some or all of your stimulus check to take care of your family's needs right now. There are many ways you can use that cash, but if you want to make the best use of it for your family’s safety and peace of mind, here are the seven best ways to use your stimulus check.
ONE: PUT IT IN AN EMERGENCY FUND ACCOUNT
If you are able, put the money into a high yield emergency fund account through your bank or credit union. Placing the money into a rainy day fund, or peace of mind fund, will allow you to accrue interest on that money and generate more value down the line. Having a rainy day fund allows you to be prepared for financial difficulties down the line, and usually they require over 1,000 dollars to start. Having a rainy day fund takes the edge off when stressful situations come up, offering you a safety net to handle the unexpected expenses of life.
By placing your money into a high yield emergency fund account, you can increase its value over the next year by as much as one half of what you invested into it. Not bad! You’ll want to look into what your bank offers, and what other companies offer for such accounts to find the best fit for you. If you can afford to place some or all of your stimulus check into an emergency fund, this may be the best way to spend your government money. This way you can get started on having what you need for times of crisis that will come along farther down the line of life. The current pandemic is a stressful, scary time. But it is not the last time things will get difficult. Being prepared is key to being there for your family when they need you most.
TWO: PAY OFF DEBT
If you have a good amount of debt, using your stimulus check to cover some or all of it is a very wise investment. Many people are carrying debt in the United States, as well. A recent study showed that 80 percent of Americans have at least some debt, with the average household having nearly nine thousand dollars in debt at any given time. Taking your stimulus money and using it to get ahead on your debts is a great way to plan for the future and relieve some of your money woes along the way. Getting debt free is a great way to be a hero for your family, because you will have more of your own resources to put toward investments, education, and medical needs for when your family needs them.
Being there for your family is about planning for the future. Paying off debts frees your future up to allow for more choice and reward in what you do with your money and time. Credit card debt is the best place for you to alleviate debt issues for now with your stimulus check. If you have student loan debt, the government has currently frozen those interests until the pandemic has passed. So put your mind at ease, reduce or totally pay off your debts, and put your stimulus to good use for you and your family’s future.
THREE: INVEST IT
The stock market is at a down turn right now. For some, that is a scary thing. But what that means is those stocks are at a pretty low cost for investors. Putting your stimulus money into a stock could be a good way to turn it into more money down the road. Investing in the stock market is a difficult thing to do well. There are a lot of factors and possibilities that cannot be fully predicted. That’s why when you choose to invest, if you do, you should invest in things you are more familiar with. Look into different companies. Find ones that are similar to your own trade or profession, and consider how well those markets are doing currently. If you see a possibility of the market going down farther for those companies, wait until that happens; then invest. Getting it at the lowest cost is important for getting the highest return when things get better in the future.
Investing money doesn’t only mean the stock market, either. You could invest it into your own business, or an education program you’ve been needing to increase your value as an employee or employer. However you choose to invest, be sure to do your research beforehand and make an informed investment.
FOUR: DONATE IT
If you’ve not been affected by a job loss or the economic downturn, you could consider donating the stimulus check to help other people who’ve lost everything. Some families aren’t doing well right now, with both parents out of work, and not having been able to set aside money for a rainy day before the pandemic came along. These families could greatly benefit from your charity if you can afford to help them. On the subject of donating your stimulus, Doug Garrison, wealth advisor for Investec Wealth Strategies located in Houston, Texas, said, “If you’ve kept your job and have an adequate emergency fund, you might want to consider donating a portion of the stimulus check to help those who aren’t as fortunate as you. Times such as this call for compassion and solidarity.”
FIVE: COVER YOUR NEEDS
If you’ve been faced with reduced income as a result of the COVID-19 pandemic, using your stimulus money to patch the holes in your expenses is a wise decision. You can divide it into the pieces you need to fill your rent or mortgage needs, utility bills, and more. Being wise with your stimulus check means looking into what your current expenses are, how much you are currently making either from your employment or unemployment coverage during this pandemic, and then seeing where the biggest concerns are in your expenses. If you are $500 dollar short for your rent/mortgage payments right now, you could use the stimulus check to cover that hole for two months and still have $200 left over. By using this method of covering for your needs with your stimulus check, you reduce the likelihood that your money will be spent, either accidentally or not, on things that you and your family don’t really need.
SIX: PREPARE FOR DISASTERS
Preparing for a disaster means having food, water, medical supplies, and even money set aside for when unexpected events like earthquakes, hurricanes, tornadoes, or floods come along. These sorts of natural disasters can cause roads to close, local infrastructure to be compromised, and could leave many people without access to grocery stores, food banks, and other essentials. Having food storage ready to go will help you protect your family from such events, and this stimulus check could be your opportunity to begin preparing for these disasters. Food, water, and medical supplies are the main things you’ll need when a disaster strikes. You can never be too prepared.
SEVEN: GET SOMETHING FUN
Things are difficult out there right now. If you’ve lost your job, you likely will need this stimulus check to cover for your necessities. Use it wisely! However, your family is also struggling to find normalcy in these abnormal times. Using a part of your stimulus check to get something fun for your family, like a new game, or a takeout dinner, are good ways to alleviate some of the stress in these stressful times.
However you choose to spend your stimulus check, be wise with it. This is a good time for you to make the preparations necessary to be the hero your family needs when crisis strikes.