Another round of stimulus checks has been approved which is great news for many of us.  This money is intended to help us weather the storm of the coronavirus pandemic and encourage consumer spending to support the economy. 

It’s not too early to start planning to help ensure it makes the biggest difference in your finances. Obviously the best use of this money depends on your financial situation and your goals. If you have had a loss or reduction in income, you may need to use the money to help meet your immediate financial needs like paying rent and bills.  If you are still employed or have some money saved, you could potentially use this money to build up your savings or invest for the future.

Depending on your most urgent financial priorities, we recommend approaching your plan in this order:
 

Cover the essentials.

In addition to groceries, staying current on your utilities, making payments on your mortgage or rent, paying your auto or life insurance premiums and making minimum payments on your credit card balances or other debts should be your first priority.

 

Pay down debt.

Using some of your stimulus to pay down high-interest debt like credit cards is a good idea.  Paying a little extra to a line of credit or credit card will free up the credit in case you need to rely on this available credit as a plan b or c in a future emergency.

 

Build your emergency savings.

If your debts are manageable and you do not have an emergency fund, you may want to put some or all of your stimulus check into an emergency fund.  Having this cash in the bank will allow you to protect yourself against any future financial emergencies that could come up.

 

Invest for the future.

If you are already feeling financially stable, the stimulus check would provide a great opportunity to look at your long-term goals.  There are a few options depending on your goals such as Traditional or Roth IRAs to save towards retirement, savings accounts for college, and various other investment options depending on how far off your goals are.

 

Give some money away.

If you’re financially secure and your retirement savings are well underway, giving some of your stimulus money to charity is a nice way to make a difference in your community.

 

Splurge smartly.

If you can, set aside some of the money to spend on something fun for you and your family. We’re all feeling stress and uncertainty about the future right now, and spending some money on yourself and your family can be good for your mental health.


No matter how you choose to spend your stimulus money, the best way to maximize its impact is by having a plan.

Credit Human is committed to helping you build the slack you need right now. Make an appointment with one of our Financial Health Centers today to sit down and discuss your unique situation. They’ll help you make a plan that’s best for you.