As part of the $2 trillion economic stimulus package passed by the government under the CARES Act, most Americans will receive a stimulus check to help ease the financial impact of the COVID-19 pandemic. This is a one-time cash payment for U.S. residents with AGI up to $75,000 ($150,000 for joint filers). Here's the breakdown:
- Individuals - $1200
- Married couples - $2400 (each individual gets $1200)
- Per child - $500
So what are some of the best ways to use your check?
1. Pay your short-term bills.
Before you spend it, check to see if you can lower your existing bills. Call your bank, lending institutions and credit card providers about ways to adjust your payment plan or pause your current payments for the meantime. It's worth looking into to see what options may be available.
2. Buy yourself or a loved one a little gift.
Maintaining your mental and physical well-being during this time can be tough. Allow yourself some grace to use a little bit of your check to buy yourself or a loved one something to make the day that much brighter.
3. Donate to charity or help out your local businesses.
If you're able to, consider making a donation to a non-profit organization that is directly helping others impacted by the COVID-19 pandemic. Check out a list of organizations here. Many small businesses are hurting right now; consider buying some gift certificates for services to use in the future or gift to someone in need. You can also buy a gift certificate for an essential worker in your neighborhood to show thanks. A win-win for everyone.
4. Save it if you lost your income.
If you experienced a loss of income or are uncertain about its stability, put the remainder of your check in a liquid account like a savings or money market account. Be sure the account is FDIC- or NCUA-insured.
5. Pay off some debt.
If your income is stable and you have credit cards or other debt with interest rates of more than 10%, use some of the money to pay off that debt.
If your income is stable and you have debt that is lower than 10%, save your check to build your emergency cushion. Typically we advise that you should pay off debt with interest rates between 5% and 10% as well, but with uncertain times, that rainy day fund may come in handy.
6. Invest it.
If you have stable income, no debt and a strong emergency reserve fund, then we recommend investing it into platforms that make sense for your financial goals, risk tolerance and overall situation.
Want to know which works best for you? Send us an email: firstname.lastname@example.org. We're in this together.
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