The public is finally getting some relief. Here’s how to put that money to good use.
At long last, relief is finally here, in the form of a second round of stimulus checks. Those payments won’t be as generous as the first round issued under the CARES Act, topping out at $600 per adult, half the $1,200 that went out earlier in the year. But they’ll still be a welcome windfall for the millions of desperate Americans hanging on by a thread.
If you’re getting a stimulus payment and are in dire financial straits, you may need the money for basics like food and medications. But if you have the flexibility, here are some ways to put that cash to good use.
1. Boost your emergency fund
A big reason many people have struggled during the pandemic is that they had no emergency savings. If you don’t have at least three months’ worth of living expenses in a savings account, that’s exactly where your stimulus cash should go. And even if you are sitting on enough for three months’ worth of bills, you may want a more robust cushion in case things take a turn for the worse in the near future.
2. Pay off high-interest debt
If you’re carrying a balance on your credit cards, a $600 windfall could help you chip away at it. And the sooner you get rid of that debt, the less interest you’ll get stuck paying. Aim to pay off the card charging the most interest first, and work your way down from there.
3. Get ahead of upcoming expenses
This winter could be a hard one with coronavirus cases surging all over the country. It’s a good move to maintain a healthy stock of essential supplies, like toilet paper, over-the-counter medications, non-perishable foods, and cleaning items. Your stimulus check can help you foot that bill.
4. Cover home repairs you’ve put off
If you’ve neglected a dying fridge or a malfunctioning heating system due to a lack of funds, your stimulus payment could be your ticket to addressing the issue — and preventing it from escalating into a costlier one. You may even want to use that cash to cover minor home repairs that improve your quality of life — for example, getting that leaky faucet to finally stop dripping.
5. Secure better transportation
If you need a better vehicle to safely drive around town, your stimulus check could become part of your down payment. Or, you can use that money to fix up a car you already own that needs work. You might even use that money to purchase a bike, if you live where that’s a reasonable mode of transportation.
6. Invest in your career
Want a new job this year? If there are obstacles between you and the job you want, you can use your stimulus check to overcome them. You might, for example, need to take an online course to build skills, and your stimulus check could pay for it. Or you may want to buy something useful to your job hunt, like a new laptop.
7. Pad your retirement account
If you don’t need your stimulus cash for anything near-term, consider using that money to secure your future. You can make a $600 deposit to your IRA, or have an extra $600 deducted from your paychecks for your 401(k) and reimburse yourself.
It’s been months since Americans received a round of stimulus cash, and this could be the last round that’s issued in the pandemic, so don’t let that money go to waste. Even if you’re covering your basic expenses without worry, it pays to make the most of that windfall.