Some weeks ago, the federal government promised to send millions of people checks as part of the $2.2 trillion stimulus bill signed into law by Donald Trump in late March (The Coronavirus Aid, Relief, and Economic Security Act). People who make less than $99,000 (or couples who make less than $198,000) are eligible to receive the stimulus check. The maximum amount you can receive is $12000, while couples get up to $2,400. Children below the age of 17 will also get $500. Although some people have received their checks, you may have to wait several weeks before you finally get yours. When you do, it is imperative that you know the best ways to spend your coronavirus relief check.
Because everyone’s financial situation is different, here, we will give different ways anyone can choose to spend their money based on what they already have.
7 Best Ways to Spend Your Coronavirus Relief Check
Many people have been sent out of their jobs already while some have been suspended without pay until all this is over. As a result, there’s a limited source of income. This is the best time for you to prioritize your needs. You should spend your stimulus money wisely, so you have enough food to eat and a place to live in.
Because the check you receive may not be able to handle all your expenses, you have to create a very realistic budget. Cut down all the unnecessary things you don’t need during the lockdown and focus on your basic amenities.
Read our Beginner’s Guide to Budgeting if you’re finding it hard to create a realistic budget.
Total the cost of all the essential items you need and compare it to what you have in your savings and checking accounts and stimulus check. If the money you have isn’t enough, it’s not too late to seek financial assistance.
Putting money into your emergency fund is one of the best ways to spend your coronavirus relief check if you’re still working and you have enough money to cover your expenses.
As mentioned earlier, this is not a time you spend lavishly and stock up on things you don’t need. Because no one can predict when this would end, everyone has to be very careful.
If this crisis continues for a longer period, the job you have today may no longer be secured. So, what do you do when there’s no money coming into your accounts anymore? If you didn’t prepare by bolstering your emergency fund, you may end up suffering the consequences.
Once you get your stimulus check, calculate how much you need to spend on essentials. If you still have enough from your job, throw that money into an emergency fund. But if you have to use some money from the relief check, separate what you have to spend from your savings.
To increase the money in your emergency fund, save in a high-yield savings account. So, the interest accrued is greater than when you save in a normal savings account. Look forward to saving enough to cover six months of expenses. We hope the crisis doesn’t last that long.
Pay Down Debt
If you have enough in your checking and savings account, and you also have enough in your emergency fund to last a long time, then you can use the coronavirus relief check to pay what you owe.
One of the most important debts you can repay with this money is your credit card debt. Putting it on student loan debt may not be the best option because the lawmakers may still take action on student-loan relief. So, you shouldn’t jump into repaying that yet.
Look into paying off your debts on credit cards with interest rates of 8% and above.
This may be a bit risky if you don’t have the stomach for it. But if your accounts are filled, you have enough in your emergency fund, and you have no pending debts to settle, then you should look into the good investment opportunities available.
You can invest in equities, businesses that are making a lot of money during this crisis (such as virtual learning companies, video games, etc).
Also, you can invest in exchange-traded funds (ETFs) if you don’t like to go into individual businesses. Some ETFs have exposure to many industries, so this cuts down the risk of investing in a company that may file for bankruptcy in the nearest future.
Invest in Yourself
Although it feels like everything may keep getting worse, the world will return back to normal within a matter of months. You will be out there trying to get a promotion . . . again. If you’ve already been fired, you may start looking for a better job than your previous one.
Investing in yourself is one of the best ways to spend your coronavirus relief check if you have a robust emergency fund and no big debts to settle.
To increase your chances of getting a promotion or bagging that big job, you can take a certification course online. You can also learn a new skill that is beneficial to your growth.
You can decide to go into entrepreneurship if you don’t want to go back to work. The relief check can be your seed capital.
Cover Upfront Expenses
You can decide to save money in the future by carrying out activities that will help you save money in the long run.
For instance, you can start a small garden behind your house where you grow your own produce. So, you don’t have to spend as much as you do on groceries after a while.
You can also decide to buy reusable items to replace the ones you always throw away after use such as bidet attachments, cloth diapers, etc.
If you have enough money, there’s nothing wrong with giving out to those who don’t have.
Some small companies will shut down permanently because they don’t have enough money to fund themselves during this period. You can be of help by shifting your shopping from big stores to local merchants, keeping your memberships to these small businesses even though you can’t patronize them at this time, and also finding ways to shop even if the shop is closed.
You can also tip workers such as delivery drivers, cookers, and servers when you go out to buy food or order an item.
Another way to give out is to donate to charity. Think of the most important thing to you and where you want your money to make the most impact. There’s no best charity to support. All that matters is that you’re happy with where you put your money. It could be arts, housing, and charities for the LGBTQIA+, or even the environment. Philanthropy is a very personal thing.
When is your Stimulus Check Coming?
You now know the best ways to spend your coronavirus relief check, but you’ve not received yours yet. You’ve heard of people who have gotten theirs and you’re getting anxious. Why hasn’t your stimulus check come yet?
- Some individuals received their checks in mid-April. They filed for taxes in 2018 or 2019 and provided their direct deposit information. The IRS is carrying out direct bank transfers to the bank account listed on your most recent tax return.
- If you need the money soon, file your 2019 taxes now even though it isn’t due until July 15, 2020. About 88 million payments were made ($158 billion) as of April 17, 2020.
- If you didn’t provide direct deposit information when filing taxes in 2018 or 2019, then you may receive your check between May and mid-September. From May 4, the IRS will begin to issue out paper checks to those who didn’t fill their direct deposit information in their latest tax return.
- Senior citizens and other Social Security recipients who aren’t required to file a tax return to get their stimulus money may be waiting from now through the end of 2020. If your direct deposit is on file with the IRS, then you should get your money faster.
- Veterans Affairs beneficiaries, some people with low incomes, and other individuals who aren’t required to submit a tax return but their details are not with the IRS or Social Security Administration may have to submit a simple tax return.
- If you think your check should have arrived but you haven’t seen it yet, check the IRS website for updates. Don’t call them. By May 4, they’ll begin to send about 5 million checks per week. It’s a lot of work they have to plan for.
Generally, have it in mind that if you’re receiving a paper check, the more money you make, the longer it may take for your stimulus money to arrive. The IRS will prioritize the low-income earners first because they most likely need the money more.
So, just remain patient. Your money will get to you. When it does, you know the best way to spend it.