How To Use That Stimulus Money Sensibly

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The third round of stimulus checks might be on the way very soon. There’s talk of a $1.9 TRILLION Covid-19 Relief Bill that President Biden and the Democrats are trying to get passed in Congress this week. The “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act” provided relief back in April of 2020. The CARES Act contained a record $2.1 TRILLION in relief spending, but for a lot of people, that one stimulus check and the smaller one thereafter, didn’t last long. Many Americans are waiting with bated breath, hoping for some more assistance.

There have been millions of Americans impacted by the Coronavirus in 2020 and ongoing into 2021. Another 900,000 Americans filed for unemployment last week. In order to at least somewhat alleviate the difficulties brought upon by this virus, the government is trying to get this new Covid-19 relief bill passed ASAP. There is much debate as to whether or not this new sum of money will be enough to take care of immediate needs, and certain families and adults may not qualify based on their yearly income or if they didn’t file taxes last year.

There are still a lot of people who have never received their stimulus payment from the last handout. Those people should check the IRS webpage setup for checking on the status of their stimulus check. You can find that webpage here: https://www.irs.gov/coronavirus/get-my-payment

If you’re eligible for a stimulus check and are expecting to receive this money, how you use it can prove to be very important. Here are some suggestions as to what the best course of action is when it comes to receiving a stimulus check!

Take Care Of Immediate Needs –

Your immediate needs should serve as your top priority. This includes groceries, water, utilities, clothing, rent or mortgage payment, and anything that helps promote your survival during this time. Bills are also something that you may want to consider paying off with this CARES act lifeline. However, you may also want to consider that many banks, utility companies, and other essential service providers are offering mortgage, rent, and utility bill relief because of these difficult times.

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Therefore, you should take advantage of these savings and allocate your funds as appropriate. Contact your loan and credit providers and see what benefits they may offer. Many happen to be refinancing their homes and are getting better fixed rates and lower monthly payments.

Pay Your Taxes Early –

It’s a new year, and that means that the April tax deadline is once again approaching. The IRS has pushed back the official start date for filing to February 12th this year. However, suppose you were to file your taxes as soon as possible. In that case, you could get this new stimulus payment even sooner and speed up delivery on any missing money that the IRS might owe you.

Conversely, if you know that you are going to owe a decent amount of money to the IRS, it might be a wise decision to save this new stimulus money and put it towards paying your taxes. Owing back payments to the government for taxes is something you NEVER want to do. The choice is up to you, but it’s definitely something to think about.

Set up an Emergency Fund –

Times like these show that it is very useful and prudent to have an emergency fund handy. You shouldn’t wait for a pandemic to ravage the world to start an emergency fund, but if you haven’t, this new stimulus check can be a great way to start. You should find savings accounts that have high interest rates, and place money in there. This money should not be touched at all and should only be used in case of a real emergency.

The current outbreak of the coronavirus shows that the world around you can change in the blink of an eye. Ideally, you will want to have enough funds to cover at least 3 to 6 months’ worth of household expenses at one time. Use this money as a starting point, and continue to add gradually as you are able. A little bit each week goes a long way.

Reduce Your Debt –

This funding provided by another round of stimulus checks can also serve as a great way to reduce your debt. Reducing your debt is one of the pillars of securing your financial future, and a significant payment made to pay off any debt that you have now will pay off in the long run. This will also reduce the amount of overall interest that you pay on the life of the debt. You’ll have more available money for yourself as you make larger payments. However, just like with rent and mortgage payments, many credit card companies are offering waived interest and deferred payments at this time. Read the fine print and see if you qualify. Give your creditors a call and try to work something out with them. Contact a nonprofit credit counseling agency for free assistance and help.

Give To Those Less Fortunate –

If you happen to be doing better than others financially or fortunately still have a stable form of employment during this time, you should consider giving a portion of your stimulus check to those less fortunate. Hospitals are in consistent need of ventilators and PPE (personal protective equipment), while food banks are exhausting many of their resources. Consider making a donation to these worthy causes to ease their burden. You can also help out family and friends who you know have been hit harder than most. Make sure you’re in a good, healthy, financial situation first though, so you’re not making a decision that could come back to haunt you.

Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.