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Back in March the government approved another wave of stimulus checks. If you qualified, you should be receiving a check in the amount of $1400. For many, this stimulus check will be a lifeline for the very basic cost of living. Others may encounter some flexibility in how they spend their check. How you spend your stimulus check will highly depend on your unique situation so be sure to consider all angles before deciding. Below are our recommendations on the best way to spend your stimulus check.
Do not allow yourself or your family to go without the basics which include food/water, electricity, transportation, and shelter. If you are on your last leg, pay these expenses in that order. If you do not have these basics covered, do not think about spending your stimulus check anywhere else.
If you have all your basics covered, consider using the stimulus money to pay off high-interest debt. Credit card debt can be a real hardship especially if you’re stuck paying high interest rates. However, many credit card companies are offering leniency in these difficult times to their customers. cnbc has a comprehensive list of companies offering hardship assistance so be sure to check that out to see if you qualify.
The government wants you to spend this money as the intent of the stimulus check is to stimulate the economy. However, for many, employment is still very unsure. If you’re not sure if you will have a job in the next few weeks and your emergency fund is running low, consider saving the money for future emergencies. As long as your basics are covered, there is no requirement for you to spend this money. This stimulus check is meant for you to use it in the best way possible for your situation. Even better, consider a high-yield savings account to maximize your interest.
Life happens which means things don’t always go as planned. Whether a leaky roof, car repair, or surprise medical bill, the stimulus check can help cover some of life’s little surprises. Before allocating the money, make sure you have budgeted for this expense correctly-the last thing you want is to get started on a home repair that will cost you a lot more than expected. For help, check out our guide on budgeting.
Not everyone who received the stimulus check has encountered severe hardship. Perhaps you managed to just get by the income qualifications but you’re doing just fine. If you have covered off on all basics, paid down your debt, and have an emergency fund covered, consider investing. $1400 may not seem like much at first but after 5 years and a monthly contribution of just $100, you’ll be sitting on $9,000 (assuming a 7% annual return). New to investing? Don’t worry we have you covered. Check out our investment tips for beginners to get you started.