The COVID-19 pandemic has rendered millions of people jobless. Although unemployment benefits are there to help combat its effects, most of the time, these are not enough to replace a regular paycheck.
This is one of the reasons why in late March, an economic stimulus package was introduced. It has several provisions and among this is the one-time payment of $1,200 for all eligible Americans with income under a particular threshold.
The COVID-19 stimulus checks have started to land in mailboxes and bank accounts. If you are also getting one, chances are you are wondering how you should spend this money. Always remember that the government issued these checks to help families meet their basic living essentials.
If you didn’t lose your source of income and you are still lucky enough to have a job, you have plenty of choices on what you can do with this money. On the other hand, your choices might be limited if your income was cut or you were laid off.
Make sure you consider your family’s needs and financial situation when planning how to spend this money.
But if you need some ideas, here are the top 5 things to do with your stimulus check:
1. Meet the Basic Needs of Your Family
You can use the check as a supplement for your reduced income. As there is no way to tell how long the pandemic and its harsh effects will last, you can try stretching the money out for 3 to 6 months. This might not be that much but it could make things a bit more endurable.
2. Set It Aside for Your Savings
If there is no need for any income supplementation, you can add it to your emergency fund. Continue building your savings because life can be so uncertain, after all.
3. Pay Down Your Debts
After your basic needs are met and you have put some money into your savings, it is now time to deal with your debt. Pay off your credit card if you can and reduce the balance of your credit limit to 30% or lower. If you got existing loans, determine if you could pay some extra toward the principal. The amount doesn’t matter because any amount helps.
4. Start Investing in Yourself
Try to learn new skills, take online courses to improve your marketability and help you land a better job position, or start your own side hustle. Find something that will enrich and add value to your life.
5. Invest in Your Financial Future
Some online platforms let you start your investments with a very minimal amount. Take this as a chance to test the waters and learn the market. These platforms are perfect for budding investors and could also help you increase your comfort level and build your confidence. These small steps to investment are the steps you can take to secure your financial future.
Use this list of the top 5 things to do with your stimulus check as your guide to ensure that the money won’t go to waste.