- Congress and the White House have passed a stimulus bill meant to offset economic effects of the coronavirus.
- One part of the bill includes sending $1,200 checks to Americans making less than $75,000 per year.
- While some people will need this money to make ends meet, others can use this money as an extra boost to help meet goals.
Stimulus checks could be a lifeline for many people, and covering those needs is the best thing you can do for yourself and the economy at large. Check out our tips on where to allocate this money and how to maximize these funds.
Strategize before spending
Before spending any of the money, formulate a plan, starting with the necessities.
You might need this cash for food, supplies and critical bills. If you can afford to and if need be, save some of the money for the weeks ahead and the next round of bills.
Make a new budget
No one knows how long it will take for America to get back to normal, which means you will want to stretch your stimulus check as much as possible. Having a budget is the best way to navigate where your money is going. If you already have a budget you will want to reevaluate it. The world is different than it was a few months ago.
A budget will help you make smarter spending decisions, including potentially cutting certain services or subscriptions.
If your income is stable and you necessarily need the money for immediate relief, here are a few smart ways to use the extra money.
Build up your emergency fund account
Your first priority should be adding a pad to your emergency savings. Even if your job is safe for now, no one knows what the future may hold.
If you don’t currently have an emergency fund, the proposed stimulus checks may be enough to generate a decently sized one to kick-start your financial backup. Most experts agree that having three to six months’ worth of expenses in cash is a good rule of thumb. But if you can save even more in cash, you’re in an even better position.
Even if the money isn’t needed right away, having it available if needed later is a financial buffer and provides some peace of mind.
Pay down debt
If you’re comfortable with the size of your emergency fund, it’s time to look at paying down debts. Paying off credit cards would be a great way to get an immediate guaranteed return.Top focus should go to credit cards with interest rates of 8%, and above.
It’s good to note that tackling debt and building up an emergency fund are in many ways equally valuable.
Spend it locally
Now it’s time to help others.
Some companies will weather these mandated temporary closures. Other small businesses fear they will shut down completely. Here’s how you can support local.
Buy gift cards. Buying gift cards helps by essentially giving stores a mini loan to cover fixed costs.
Order takeout. Restaurants and bars are allowed to sell to-go food and drinks for takeout and delivery.
Order merchandise from your favorite small businesses online.
Shift your shopping from big-box stores to local merchants. Buy bread from your local bakery rather than a supermarket.
For many Americans, these are tough times. But making thoughtful spending choices and assessing your needs and wants can make the dollars you have last longer.
Stimulus checks won’t bridge the gap very long. ETS Recruiters are here to help minimize disruption in your career and personal life. Explore open jobs or live chat an ETS team member now.