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What To Do With Your Stimulus Check

In an effort to provide some relief to the many people struggling from the effects of COVID-19, the federal government has begun sending out a stimulus check of $1,200 per adult and $500 per child under 17, subject to income limits.  If you are like the majority of Americans, you have received or are waiting for your stimulus deposit and you may be wondering what you should do with it. Or, you may have loved ones receiving the stimulus. Of course, what to do with a stimulus check will depend greatly on personal circumstance. Depending on your situation, we broke down some of the ways to use your stimulus check to give you options to make the most of your stimulus money.

If You’re Financially Stable & Have Reliable Income with a Sufficient Emergency Fund:

Donate It: If you are one of the lucky few who hasn’t experienced adverse financial effects through all of this, consider donating part of your stimulus check to those who do need it. There are many nonprofits and charities who are desperate for donations now more than ever. Or, consider donating to your favorite local shops or neighborhood families in need. Now is the time for people to come together and support each other. If you are able, consider helping out financially.

Gift It: You may have family members or friends who’ve lost their jobs and are really struggling during this time. If so, consider using your stimulus money to help them out. Now could also be a great time to add to your kids or grandkids college savings plans with your stimulus money. If the $1,200 doesn’t have a significance for you, consider that it could make a great difference for someone else that you love.

Support Local Businesses: Many small and local businesses are struggling to survive right now. If you are fortunate enough to have financial stability, consider using your stimulus check to support local businesses and spend it at your favorite restaurants and shops. Take a moment to reflect on what you enjoyed doing before Stay At Home, and make a donation to the businesses that made it possible. This both benefits the places you love and helps keep them open for your future enjoyment. Many businesses are asking that patrons buy gift cards to support them now, to be used once this crisis is over. Consider ordering takeout from your favorite restaurants, as many are still offering delivery, cocktail orders and special deals.

Spend It: It is no secret that the economy is really struggling right now. The average consumer is staying home and not leaving their house to spend money. If you are able to, spend your stimulus money on purchases you have been considering in order to help stimulate the economy. Have you been waiting for a good time to buy that new patio furniture or fancy bike? Well, now, with an extra $1,200 toward it, it may be just the right time to make that purchase you’ve been considering. Remember to shop online when you can or take safety measures for yourself and others when you go out.

Invest It: I can’t stress this enough, investing your $1,200 should only be chosen if you have stable income and a sufficient emergency fund with at least 6 months’ worth of your expenses. As long as you are stable financially and expect to be for months to come, now could be a great time to invest. It’s a good time to be a buyer in the stock market, as everything is on sale. However, remember that whatever you put in the market can always go down, so only invest if you can afford to lose some of it if the market continues to decline. Additionally, there can be consequences to retrieving money once invested if you end up needing it.

If You’re Struggling Financially & Don’t Have A Sufficient Emergency Fund:

Use it for necessities: After all, this stimulus check is meant to help people pay for essential goods and services during the crisis, like rent, mortgage payments, groceries, insurance, and food. If you’ve lost your job (temporarily or otherwise), have no emergency fund to fall back on and find yourself struggling financially through this crisis, this stimulus check should absolutely be used for your necessary expenses. It may not be a ton of money, but hopefully it can help reduce some of the stress and fear you may be feeling right now. Leverage the stimulus to meet your needs while reducing the accumulation of debt on credit cards whenever possible.

Save it in an emergency fund: If you are fortunate enough to still have your regular income and don’t desperately need the stimulus check for rent or groceries, consider putting it toward your emergency fund before you run off spending it–even on what might seem like a reasonable purchase now. It’s impossible to predict the duration of this pandemic and its long-term effects on your personal situation and the overall economy. If you don’t already maintain 6 months of your expenses in an emergency fund, park that $1,200 there in case you need it in the future. No one has any idea how long this will last and, although you may not need it now, it may be helpful in the future.

Use it Towards Debt: For many Americans, debt payments like student loans and mortgages have been waived. But many people will still have debt payments that are due during this time. Consider using your stimulus check to cover your debt payments and prevent falling behind while cash flow may be unsteady. And, if your debt payments are on pause right now, don’t run off and spend it. Consider earmarking your stimulus for later when those debt payments restart and do whatever you can not to rack up new debt.

During times of uncertainty, it is so important to have an emergency fund to fall back on. There are so many things out of our control right now, so it feels especially good to take control over your finances. Whether you need your stimulus check or not, it is a blessing to have it and use it wisely. If you aren’t sure how to use it or what to do with it, then park it away until you need it. The best thing you can have in this situation is options, so take your time when deciding how this stimulus check will help you best. The Amy Noel, Inc. team is here for you as we weather this storm. If you feel scared or concerned, give us a call and we can help relieve some of your stress and worry. We are all in this together.

ALANA MACY, CFP® 


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against losses.

Check the background of this firm/advisor on FINRA’s BrokerCheck.