With the recent passage of the Care Act, most American citizens have a stimulus check that they can look forward to receiving. This is a much needed economic driver and it appears that the checks should be sent in about three weeks. Many families have been impacted by the pandemic and are reeling from the impact. I am sure that they are anxiously awaiting the checks.
How much will I get?
Most citizens should be receiving $1,200 for individuals, or $2,400 if you are married. You will also be receiving an additional $500 per child. There is one caveat though – Individuals who made more than $75,000 (or $150,000 total if you filed jointly) will be receiving smaller amounts in increments, which eventually phases out depending on your 2018 income. If you are curious about the exact amount you will receive, use this calculator.
How and when will I receive my stimulus check?
Most citizens will receive a direct deposit into their bank account if they used direct deposit for their taxes in their latest filing year. If you have not utilized direct deposit, then you will be receiving your stimulus check in the mail. Now, as to when you will get it… Right now the Fed is claiming that you should receive your deposit within three weeks. Many others are claiming that it will likely take longer than that. So that you don’t set too high expectations, I would suggest that you expect a 4-6 week turnaround.
Be careful to not spend the check before you receive it. Yes, it is coming, but there is no way to know how long it will take. As this pandemic has shown, you never know what can happen. However, that doesn’t mean that we can’t think about how to use it!
Use your Stimulus Check to pay for Expenses
The reality is that a lot have experienced a huge economic impact from this situation. This money will have to be used to pay for necessities like food, housing, and car payments. For those in that situation, hang in there. We will make it through this together. I know that everything is chaotic right now. If you don’t already have a budget, consider starting one to bring some order during this time of upheaval. Having a budget and control of your money can really change your perspective and will get you on track to rebuild.
Put it into Savings
If you still have your salary, it may make sense for you to go ahead and put this directly into savings. If you don’t have at least 6 months of savings built up, than it makes sense to put the money into savings. I know, you really want to spend this money. I understand the urge! However, even though you have a job now, it is difficult to predict what the economy will look like once life goes back to normal. Companies may have to lay workers off further down the road, and you want to make sure that you protect yourself. If you are in an impacted industry (or uncertain), I would advise you to build 6 months of savings right now instead of my typical $2,000 emergency fund rule. A little extra cushion in your savings could really pay off in the future.
Pay off Debt
Are you in an industry that is actually thriving during this pandemic? Maybe you feel comfortable with your work situation and already have $2,000 in savings. Then it makes sense to use this money to pay off some debt! Think how wonderful it will feel to be able to see a large chunk of your debt go away, or maybe this will clear an entire debt! Any debt that you can pay off now will set you up for success in the future!
Consider Investing it
Alright, so you have 6 months of savings and have paid off your debt. You are in an amazing situation! You have the ability to take advantage of this downturn and invest your money. The stock market has seen a huge dip in value lately, and there are great companies out there that are trading at huge discounts. Hopefully, you have an IRA or investing account that you have been investing with. If you would prefer to invest on your own, I would recommend that you utilize Robinhood as they offer commission-free trades. Take advantage of this windfall in cash to increase your investments. You won’t regret it.
Use your Stimulus Check to Help your Local Community
Listen, if none of the above options appeal to you, take advantage of these extra funds to help those around you. The reality is that the stimulus checks may not be enough for some in need in your community. Take advantage of this opportunity to help those in need.
One way to help is to support your local businesses. Many small businesses don’t have the margins to be able to withstand a couple of months of low revenue. If you are going to spend the money, spend it locally! A lot of small businesses are owned by families where it is the primary source of income. I know that in our region, we are seeing a lot of businesses that are contemplating closing and some already have. Throughout this crisis, there has been so much community pride and neighbors have been doing a great job of supporting one another. We need to make sure that support continues!
Do What’s Best for You
I have no way to know your situation, but I wanted to provide a few ideas of how to spend your stimulus check. In the end, you know what is best for your circumstances. I would just advise to contemplate what is best for the long term security of your family, and don’t spend it until you get it! Keep in mind to help out those around you any way that you can. It doesn’t have to be money. Just do your best to be a good neighbor.
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