7 Things to Do with your Stimulus Check
More stimulus checks are coming! There is no concrete time period of when those will be sent out, but why not have a plan for how you’ll spend it? Your plan will vary based on where you are financially right now, which will be impacted by whether you are employed, have kids, own your home, or are retired. There are many factors to consider here and please remember that BillCutterz is not a substitute for speaking to a licensed advisor. *
1. Pay Your Bills
This may seem obvious, but when you have competing priorities, it can be challenging to decide what to pay first. If you’ve been struggling financially throughout the pandemic, it will probably help with your stress to look through your bills and pay what is most urgent. If necessary, you can even set aside a certain percentage of the stimulus check that will go to bills so you can stretch your check.
2. Start an Emergency Fund
Many Americans were living paycheck to paycheck before the pandemic. Saving money is a challenge in those circumstances, but the stimulus check might be an opportunity to put a little aside. Common advice is to try to save enough to cover a minimum of three months of expenses; six months if you can put that much away.
3. Pay Down Principal on Loans
Every loan you have is accruing interest for the bank. When the opportunity to pay down on the principal (a payment above and beyond your regular monthly payment) it should go straight to the actual amount you owe, also called the principal. This applies to your mortgage, car loan, personal loan, student loan, and any other loan you might have. Some loans have a penalty built into the terms of the loan if you pay the loan off early. You should check your terms and call your lender to be sure you won’t be penalized for paying on your principal. Also, make sure you indicate when you make your payment that you want the whole amount of this extra payment applied to your principal only.
4. Save it for a Future Treat
The third stimulus check may be above and beyond what you need. In that case you could:
- Start a savings account that’s just for you, separate from an emergency fund savings account. You can save for something fun, for vacation or just to use it as your petty cash.
- Buy gift cards for yourself. That way, if in the future you are strapped, you can still buy dinner, snacks, gas, or even get steak at the grocery store.
- Ensure your entertainment future by paying ahead on things like Netflix, Amazon Prime, pad your iTunes account for renting movies or buying music.
- Maybe you want to be more sensible by paying ahead on your utilities, your insurance premiums, or your estimated taxes.
- Add to your retirement fund.
- Start a savings account for your children, whether a traditional account or a college fund.
Any of these options will be helpful down the road and a nice little gift your future self will thank you for.
5. Fix What’s Broken
Sometimes, when you receive money, everything feels pressing. But now is a great time to take your car to the shop or complete home repairs. Not only will having a running car and an airtight house reduce your stress, but it can also help you keep future bills down. Now you know you won’t have to pay for a tow truck, miss work, or see your utilities bills climb because of drafty windows.
6. Donate
There are many places struggling right now, including the arts, rescues, shelters, churches and more, as they are closed to the public and donations are down. But these places are still trying to function. If you can afford to, consider donating to a non-profit. Here are just a few ideas to get you started:
- Participate in local fundraisers
- Sponsor or Adopt-a-Pet at a shelter
- Doctors without Borders
- American Red Cross
- Local food banks or pantries
- Make-a-Wish Foundation
- Support the arts with theater donations or donations to schools for the arts
- Aquariums and zoos
7. Invest in Yourself
Warren Buffet said, “Invest in as much of yourself as you can, you are your own biggest asset by far.” Loads of local places that normally have in-person classes have converted to online only classes. It doesn’t matter if you take a formal college class, a local art class, yoga class or a work-at-your-own-pace complete class. You can improve your crafting game, level up for work, or train in a new skill altogether so you can switch careers.
In the end, the stimulus check can help you and your family in a multitude of ways including saving, paying down bills or donating. Hopefully, no matter what you choose, you will feel better once you have selected how you’ll spend your stimulus check.
*DISCLAIMER: Billcutterz is not an investment advisor. Before you invest you should first consult with an investment advisor or your accountant.
