4 Things To Do With Your Coronavirus Stimulus Check

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The U.S. government has approved the third round of Economic Impact Payments in an attempt to stimulate the U.S. economy and help Americans who might be suffering financially because of the coronavirus pandemic.

The relief package provides direct cash payments of up to $1,400 for most adults — or $2,800 for married couples who file their taxes jointly — plus $1,400 per qualified dependent.

So how should you plan to use this money if you receive it?

What You Do With Your Check Should Depend on Your Circumstances

What you do with the funds is a personal decision. But money expert Clark Howard says that your current financial situation and prognosis for the next few months should factor into your choice of whether to spend, save, invest or donate the money.

Here are some different scenarios along with Clark’s recommendations.

Spend It

The federal government is trying to get cash into the hands of the people who require it to meet their basic needs in this time of crisis.

“Millions of people are going to suffer severe financial harm because of coronavirus,” Clark says. “They’ll either be laid off, have their hours cut back, or there will be no work available for people like contractors and gig workers. For those people, any money that comes in will be precious and must be used very, very carefully.”

If you are in this situation — or expect to be in the near future — you will probably be trying to figure out the best way to budget your money.

“In medicine, it’s called triage,” Clark says. “It’s exactly what happens in the hospitals as they decide who to treat when — or who not to treat. You have to look at your bills the same way. You’ve got to think about what you must have.”

Here’s how Clark says you should prioritize your spending to meet your basic needs:

1. Food

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“At the top of the list is food. You either need money to buy food or you’ve got to come up with a way to get food. It could be through food stamps,” Clark says.

2. Housing

“Next would be paying for your housing because you need to maintain a place to live.”

3. Transportation

“Once we can work again, for most of us that means having access to our vehicles,” says Clark. “So paying vehicle loans would follow housing.”

4. Utilities

You should still pay your utility bills if you can, but what if you’ve spent all you have and still owe for power, water and internet?

“There are not standardized policies,” Clark says. “However, many state regulators have outlawed shut-offs, for now, for electricity or natural gas.”

He says you should look on each provider’s website for information on coronavirus accommodations and how to contact the company for assistance. Clark emphasizes that you should not ignore the bills: Stay in touch with each company so it’s clear that you do intend to pay when you can.

What does Clark not want you to focus on if you’re without a job and have little or no savings?

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“The lowest priorities are any unsecured debt,” he says. “That’s credit cards, any personal loans: anything that is not absolutely necessary.”


Save It

If you are still employed and are able to meet your basic needs, Clark says you should strongly consider putting the stimulus money in a safe place for now.

“There are a lot of us who have not lost our jobs yet and may not lose our jobs, but we don’t have rainy day accounts,” he says. “I really need you to think about how you handle this next time period where you’ve been a lot luckier than a lot of other people who are now — or soon will be — unemployed.”

Clark says the important thing is that you save that money for unexpected things that could happen later this year.

“Thinking through every bill you have now is very much to your advantage,” Clark says.

If you’re looking for a place to save your money that will still pay you a little interest, check out our list of the Best Savings Accounts.


Invest It

If you’ve taken Clark’s advice in the past and have already established an emergency fund that could last you several months, you should consider putting your stimulus money to work for your future.

“If you’re in a position where your job looks good and secure and your savings are solid, this is a time to increase the amount of money you’re saving for retirement and keep that amount up,” Clark says.

You’ll benefit long-term from having increased your contribution even if you can afford to do so just this once.


Donate It

If you’ve taken all of the steps to weather the current crisis and feel confident that you are set up for a comfortable retirement, you could consider using the stimulus aid to help someone who is less fortunate than you.

“Any time we face a disaster or crisis in the United States, I’m so touched by the huge number of people who want to do what they can to help others in a time of need,” Clark says.

But he wants you to be sure that you really can afford to donate right now. Clark says the people in that position meet these criteria:

  • Retired with a secure source of income or working in a secure job
  • Have money in savings
  • And have money in investments or are already saving well for retirement

If you choose to donate, Clark says it’s probably wise to start close to home.

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“My thing right now is that the best efforts are those that are local — that you know how any things you give or any money you donate will be put to work.”

Just remember that, no matter how strongly you feel compelled to help others, you have to be sure you can take care of yourself and your family first.

Final Thoughts

It’s important to keep in mind that the aid money that may be coming is just that: aid. It won’t replace a regular income or even be enough to be considered a windfall by most standards.

What you chose to do with it depends on your personal circumstances. Just make sure you consider your choices carefully and put yourself in the best possible position for the uncertainty of the coming weeks and months.

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