If you already received your stimulus payment directly deposited into your bank account, or even if you are still awaiting a paper check in the mail – it’s a good idea to have a plan on how you will use this payment. Everyone’s financial situation is different, but here are four additional ways to consider spending your coronavirus relief check.
First and Foremost: Cover Your Needs
If there were ever a time to prioritize needs over wants, it’s right now. This is especially important if you’ve lost income due to unemployment, reduced hours or slow business. If this is the case for you, your stimulus money should go toward making sure you have a roof over your head and food on the table.
Create a budget and add up the cost of your essential expenses. Then look at how much money you have in your bank accounts as well as your stimulus check, to get a good picture of how long your money will stretch. Feeling overwhelmed? Create a budget that works for you with our budgeting guidebook.
If you are having trouble paying your bills, reach out to your financial institution or lender as soon as possible. Many are offering payment deferments and other relief options during this time.
Increase Your Savings
If you’re still working and bringing in enough money to cover your essential needs, look to using your stimulus check to boost your emergency fund.
No one can predict how long this pandemic will last and shelter-at-home advisories have forced many industries to change how they do business or temporarily shut down.
While the typical advice is to have at least three months’ worth of living expenses in an emergency fund, you might want to increase that if you can. Your emergency fund should help you feel financially secure. You will also want to separate your emergency savings from your spending money. A higher yield or money market account will earn interest while your money is sitting in the bank.*
Think About Your Future
If your finances are in good shape and you have an emergency fund, consider spending the money you’ll get from your stimulus check to set yourself up for a better financial future (i.e. going toward that side or start up business you’ve always wanted to get off the ground).
Making a dent in your debt up front could also help you save money in the long run. You also might want to think about using your stimulus money to cover initial expenses that’ll help you save money over time (i.e. buying gardening supplies so you can grow your own produce and cut costs on groceries while also staying out of the store right now).
If you’re in a financially stable situation with a healthy emergency fund, another good use of your stimulus money could be to help others who need it.
Use the extra cash to help a family member or friend in need, or donate to a reputable charity. You could also spend your money to support local businesses and restaurants — whether that’s through online orders or purchasing gift cards for future in-person visits.
*A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Click here to view full Rewards First program details. A First Financial membership is required to open an account or loan and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean counties.
Article Source: Nicole Dow of The Penny Hoarder