The times we live in are unprecedented and unpredictable, and that has an immediate impact on your financial well-being. In the year of COVID-19, mass unemployment, and stimulus payouts, it may be difficult to maintain your money management skills. While the prospect of additional income from the government is exciting, making a plan on how to best allocate your newly found funds can greatly improve you and your family’s future, post-pandemic.
What It Is
In a move as record breaking as COVID itself, the United States legislature passed a stimulus package valued over $2 trillion. This package is meant to lessen the pressure on US citizens, who are facing financial unknowns in the midst of a pandemic. There are a few qualifiers that determine what and when you will receive your payment, but most American’s will receive $1,200 per independent adult, and $500 for dependent claimed on the most recent tax return. Your income level and household size will also affect your check. Your stimulus can get to you in a few ways, either direct deposit or by paper check. Deposits will come in waves, over the course of a few months, and those without direct deposit setup can expect to wait a little longer to receive their paper check in the mail!
What You Should Do With It
A direct deposit of $1,200 (or more) hits your bank account, and your mind starts racing to decide what to do with it. While financial decisions are yours and yours alone, there might be a few financially-savvy ways to handle this unexpected income from your stimulus check.
Make sure your monthly bills are taken care of.
If you’ve been displaced from your job, then the priority is making sure all of your regular commitments are getting paid. While landlords and utility companies may be extending your due dates to accommodate for uncertain economic times, the bills will eventually be due, and you do not want 3 months of expenses all coming due at the same time. Taking care of your responsibilities first and foremost will reduce the strain on your pocketbook, and give you peace of mind that your most basic needs have been met.
Start padding your savings account.
As many of us have experienced in the recent weeks, changes to your employment or financial situation can come abruptly. The only way to combat the unknown of the future is to prepare as much as you can. Having a savings account, even if you can only spare pocket change, will only add to your sense of well-being during a pandemic.
Shop small and shop local.
With your leftover funds, do your best to contribute back to your community. If you were going to buy the same product online that’s available at your local corner store, give up the small convenience of two-day shipping for the knowledge that you are supporting your community the best way you can. Small business owners have experienced as much hardship as anyone recently, and we want them to still be here when the world starts to open up again. Many local businesses offer curbside or delivery, and some even have an online presence to do whatever they can for their customers.
While you don’t need to be a financial advisor to decide how to disperse your stimulus check, being informed and making responsible decisions is likely to be in your best interest in the current uncertain world today.
The IRS site is your one-stop shop for questions you may have on the stimulus, from the status of your check to making direct deposit changes.