You Received Your Stimulus Check…Now What?

Beginning in the middle of April 2020, people in the U.S. started receiving their stimulus deposits because of the Covid-19 pandemic.  Others will be receiving their paper checks in the near future.

The big question is how to use the money.  The answer will be very different for most people depending upon how they have been affected economically by the pandemic.  There is no “one size fits all” answer. You must make an honest assessment of your own situation.  There are several situations you could fall into.

Someone is still working with little to no negative economic impact.

If you are in this group, you are still receiving your regular paycheck and have kept current on our monthly obligations.  You don’t need the money to survive.  We advise that you do the following:

1. Make sure your emergency fund is funded to the level you are comfortable with.
2. Save and invest depending on where your comfort level is with risk. You can look for:
3. A higher yield savings account from Ally Bank or Marcus by Goldman Sachs. (If you have little appetite for risk.)
4. Mutual fund with a low expense ratio that fits your comfort level of risk and investment type. Use Morningstar to assist in your search.
5. Make a donation to an organization that helps the less fortunate.  Look for an organization that gives a big share of the donation to the recipient such as a religious organization or food pantry.

Your income has been somewhat impacted.

Use the stimulus money to make up short falls in your budget caused by lower income.  Keep the money in a savings account that allows you easy, immediate access to the funds. Resist the urge to spend the money on nonessentials items. None of us knows how long this will last.

You have been laid off or furloughed.

If you are receiving unemployment compensation your immediate situation may not be perilous. Use the stimulus money to fill in gaps in your budget. If your income doesn’t cover your monthly expenses, use your budget to prioritize.  What gets paid when.  Use the stimulus money to help pay for the most critical things like housing, food, medicine and utilities. If you’re having trouble meeting your obligations, reach out to the creditor to have a honest, rational conversation.  If necessary, reach out to social services agencies for assistance.

In summary, everyone has been impacted differently by the pandemic. You must look at your personal situation. Focus on you and your family’s situation, not your neighbor’s.  If you are in a position to help someone, do it.  Handle your situation, your money, your way.