Smart Ways to Spend Your Stimulus Check

Smart Ways to Spend Your Stimulus Check

Written by Nathan Woolard

So, you’re getting a stimulus check and wonder how you should spend it.  While you may be tempted to burn the money on that big screen TV you’ve been wanting or to make reservations for a future vacation, there are a number of wiser decisions to consider:

• Cover your essential expenses.  If your income has been reduced, then it’s a smart idea to redo your monthly budget and put your stimulus money toward the bills and payments that you can’t avoid.  Prioritize food, rent, and utilities, and don’t forget about less obvious expenses like prescriptions and car payments.  If necessary, don’t hesitate to sacrifice other debt payments to ensure that the most important matters are addressed.  Missing out on credit card payments can certainly cause some problems, but it’s more feasible to address that issue in the long run than to pass up on paying your rent or buying necessary medicine.
• Build up your emergency fund.  The current pandemic is exactly the kind of situation that emergency funds are designed for.  If you’ve already been dipping into your emergency fund, this gives you the ability to replace what you’ve taken out, and if you don’t have such a fund yet, it’s certainly worth preparing for the coming months by setting one up now.  It can be a great comfort to know you have more money in reserve as we continue ahead into these uncertain times.
• Pay off debt.  If you are still in a stable financial position, this can be a chance to use your extra money to pay off debt.  Those with student loan debt also have the unique opportunity to get ahead on their payments while interest is suspended.  Every dollar you can put forward now will go toward paying off the principal and reducing future interest payments.
• Support your community.  You may find your family in a safe and secure position during this crisis, but those around you might not be so lucky.  If you’re financially well equipped for the months ahead, then consider using your stimulus money to benefit those in your community that might be struggling.  Take steps to spread some kindness by donating to a food bank, buying gift cards from local businesses, and giving big tips to restaurant and grocery delivery drivers.

The days may seem long and aimless, but don’t let boredom lead you into making unwise decisions with your finances.  Assessing your needs and the feasibility of your wants can help you stretch the dollars you have to serve you and your community far more effectively.