Now that a third round of stimulus checks – worth $1,400 per eligible person – have been signed into law by President Joe Biden, there comes the question: “What will I do with this stimulus money?” While many people are thinking about spending the money on eating out, vacations, and so on, others will more than likely spend their stimulus wisely.
In this article, we’ll offer 20 tips on how to spend your stimulus check wisely, so that your funds don’t run dry prematurely.
1. Keep Paying Bills With the Stimulus Money
First and foremost, COVID-19 is more than just a healthcare crisis; it can also hurt your finances. With people out of work and filing for unemployment, there’s already a major concern on how people will be able to make ends meet. So, in hindsight, it’s understandable if eligible persons decide to use their stimulus checks on essentials like bills or expenses. According to a study done by the U.S. Census Bureau, 77.9% of respondents would most likely spend their stimulus money on the following:
- Rent
- Mortgage and/or
- Utilities, such as:
- Gas
- Electricity
- Internet, AND
- Cell phone
As you can see, many people will be more than grateful to pay bills, once they get their stimulus check, which shows how financially strapped things can be nowadays.
However, if, in any case, you’re still struggling to cover bills despite getting a stimulus check, you can contact creditors to see if you can do one of the following:
- Reduce your interest rate
- Enter deferment, OR
- Extend your loan payments
- Pay down your debt
Sometimes, creditors will waive fees if you either miss a payment or paid late – that is, if you agree to make monthly payments moving forward, and if you already have a track record of paying on time.
The good news is, during this pandemic, many lenders (i.e. mortgage lenders, credit card companies, etc.) are now working with affected customers by waiving fees and deferments.
2. Create Or Add More To An Emergency Fund
While the pandemic may have blindsided so many people in the world, understand that other things have the potential to blindside you. That’s why it’s important to create an emergency fund, if you haven’t done so already. According to The Balance, your emergency fund should be 3 to 6 months’ worth of expenses. So, when creating your emergency fund, you’ll need to calculate how much your normal expenses are, and then times them by 3 or 6.
If you already have an emergency fund, then it’s time to put some of your stimulus money in it, even if you don’t feel like you need to. This allows you to be safe than sorry, whenever something happens (i.e. your car breaks down, a medical emergency, etc.).
3. Tackle Mortgage Principal
Even with a stimulus check in the bank, you’ll still have those pesky mortgage loans to deal with. The good news is, if you tackle the principal part of your loan, you’ll most likely reduce how much interest you’ll need to pay over time. Who knows? You might even pay off the mortgage early!
4. Have A Plan For Retirement
No matter what, saving for retirement should still be something to think about, even when waiting out the pandemic. So, when you get your stimulus check, consider putting it in a Roth IRA. Since the stimulus won’t be taxed, placing it in a Roth IRA will make it even more tax-free, even when you decide to withdraw from it. Now would be wise to make your retirement contributions.
5. Buy Plenty Of School Supplies
Schools may be reduced to virtual learning, but students will still need to have school supplies on hand. Supplies include:
- Notebooks/Journals
- Pens/Pencils
- Textbooks
- Laptops, etc.
Even when schools reopen eventually, students will also need to invest in things like hand sanitizers, backpacks, etc.
That’s why it’s smart to use your stimulus money to invest in schooling to get plenty of school supplies.
6. Give Your Vehicle A Tune-Up
Believe it or not, there’s no better time than now to tune up your vehicle. Even if you haven’t been using your car as much these days, since your activities and work are limited, you still need to make sure that your car is able to run for even the simplest things like grocery shopping, or running a quick errand. So, stop by your local mechanic to have them refresh your car. While a car repair insurance policy won’t cover the routine maintenance, some of your stimulus check will.
7. Give Your Room A Remodel
Who says your room should look the same forever? Why not do something with your living space?
Maybe you can turn your room into that home office you’ve always wanted. Or, you can create a rec room that you and your family can have quality time in. With your stimulus check, you can buy the necessary things (i.e. furniture, TVs, décor, etc.) to create your dream room.
8. Give To The Needy
As the pandemic has shown, jobs have been impacted to where many people find themselves out of work, and in dire need of food, clothing, etc. For those fortunate enough to be good on money despite the pandemic, you may want to help others who are struggling.
Places like food banks and hospitals are always in need for monetary donations, along with food and clothing. Consider giving away things that you don’t need (i.e. clothes) to donation centers. Or, buy food to donate to food banks.
Plus, you can give some of your stimulus money to those in most need.
9. Time To Get Handy Around The House
Have a leaky faucet that needs fixing? Need to buy a new door and window for the house? Then, now is the time to get handy. If you find yourself spending more time at home, then chances are, you’ll start noticing the wear-and-tear that you might not have noticed before when you were busying working and or commuting. So, now is your chance to work on the repairs that you’ve been putting off for a good while.
10. Be Sure Your Pantry Is Stocked
Don’t settle for an empty pantry. If you live on little income, and you receive your stimulus, you may want to head to a discount grocery store or a warehouse club to stock up on non-perishable food items. It’s better to be safe than sorry at times like these.
11. Help Youth Centers Through Donations
With schools and many public places shutdown to adhere to social distancing guidelines put out by the Centers for Disease Control and Prevention (CDC), children are left to stay home and do activities virtually. However, the need for more socialization is at an all-time high.
That’s why youth centers like the Boys & Girls Club of America need more help than ever to provide children a brief escape from reality every so often. Consider making a partial monetary contribution to youth centers with your stimulus to help them stay funded and provide much-needed mentorship to children during these tough times.
12. Reinvent Your Outdoors
Like reinventing your living space, you should also consider reinventing your front and or back yard. With sales on outdoor furniture and accessories being abundant these days, now is the time to take advantage and find one or two steals that can brighten up your outdoor abode.
13. Save For College
While college may still be up in the air for most people, thanks to the pandemic, it’s not too early or too late to think about college, if you would like to attend. Once you’ve done your research on how much going to college will cost – tuition, room and board (if necessary), etc. – then consider using your stimulus check as a stepping stone for it. You can also do this, if you want to save for your children’s tuition.
14. Grant Someone’s Wish
Organizations like the Make-A-Wish Foundation help to fulfill the dreams of terminally-ill children. Consider donating to such causes, so that miracles can continue to blossom, and dreams can still come true, even during COVID-19.
15. Take A Trip
You heard right. Take a trip!
The truth is, almost anything can be warranted as a trip, as long as it’s being away from home for a while. In addition, with some restrictions being lifted on travel these days, you might be able to snag a great deal on hotel rooms and flights. Just remember to purchase travel insurance, in case anything changes (i.e. CDC rules, your plans, etc.).
16. Find Balance
It’s time to take back control of your life. Consider adding mindfulness in your life. You can take up yoga, or simply download and listen to a mindfulness app like Calm or Headspace (which offer premium subscriptions, if you desire).
17. Turn Your Home Into An Entertainment Center
Want more entertainment at home? Then bring in the right vibes by turning a room in your home into an entertainment center. Spice it up with equipment like a karaoke machine, a TV with HD surround sound, and or a microphone to make every night entertainment night.
18. Think About Your Mortgage Escrow
Whether you’re thinking about treating yourself, or if you’re planning a future trip, then you can use your stimulus towards cushioning your escrow account, which lets you accumulate funds in case your property tax and insurance bills are due.
19. Gift Your Wallet
Try paying a bill in advance (i.e. Netflix), or put a credit on your utilities. Paying in advance saves you from having a balance due for the next month and can allow you to get a month ahead on your expenses.
20. Invest For The Future
Finally, it’s never too early to think about the future. Whether you just use a portion of your stimulus check – or all of it – you can use the money to improve your professional skills. Maybe you can try your hand at an online course, or train to get a certification to get the job you’ve always wanted. Even if it’s just to learn a new skill, the Internet has much to offer.
Conclusion
So, now that you have your stimulus check, or are getting one soon, you’ll be able to spend it wisely with these 20 tips. It’s now up to you to decide what you do with the money.
Michael Dehoyos is a writer and editor at PhD Kingdom and Write my essay. As a marketer, he helps companies improve their marketing strategies and concepts.
