Since being signed into law on March 27, 2020, the federal relief package as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act has millions of Americans anxiously awaiting their economic impact payments (stimulus checks).
The IRS has already started sending out payments, and if you’re eligible for one, you may have already received yours.
But have you thought about how you’re going to use it?
Odds are, this is going to heavily depend on your current financial situation and how the coronavirus pandemic has affected you and your family. With the economy being in such a fragile and uncertain state right now, one thing is for sure, you don’t want to spend this money without a well thought out plan.
To help, we’re sharing several ways to make your stimulus check count, based on your current situation. See which category you fall into below and read our recommendation for how to make your check work best for you.
You’re out of Work and Need Immediate Relief
If you’re one of the roughly quarter of Americans who have either lost their job or taken a pay cut because of the coronavirus, use this stimulus check to help replace your missing paycheck.
While the stimulus check may only be a one-time payment, depending on your typical earnings from your job, you may be able to spread it out to cover your lost wages for several months. This could help with buying groceries or paying necessary bills.
And if you haven’t already, make sure to check out your state’s expanded unemployment benefits to see if you qualify for unemployment to help supplement some of your pay.
You’re Still Working or Receiving Unemployment but Don’t Have Any Living Expenses Saved
Are you still receiving an income, either through work or unemployment, and are able to make your monthly ends meet? If you are, but you don’t have any money saved to cover living expenses beyond living paycheck to paycheck, you should definitely consider putting your stimulus check into an accessible savings account, or other FDIC protected account, for an emergency fund.
Experts recommend having at least 3-6 months’ worth of living expenses saved up in case of emergencies, and with our country in a crisis, this should be your next priority after covering your immediate needs.
To determine how much your monthly living expenses are, list out every outgoing payment that you make each month. This includes bills like mortgage, rent, and utilities, credit that you owe on vehicle or personal loans and credit cards, and other necessities like groceries and gas.
This is the total amount you need each month to live your current lifestyle. Now multiply this number by 3 for 3 months, or 6 for 6 months, and this is the goal you should reach towards for your emergency fund.
Also, keep in mind, that while many creditors, landlords, and utility companies are offering assistance with payments right now, this might change at any moment, so don’t rely on the generosity of others to calculate your emergency fund.
You’re Still Working, Have an Emergency Fund, and Have Debt
If your financial situation hasn’t been impacted by COVID-19 and you already have 3-6 months of living expenses saved in an emergency fund, you can start looking to other areas to spend your stimulus check.
Start by looking at your debt. Are you paying on a high-interest credit card? Do you have only a few months left until your car is paid off? If your stimulus check will cover all or a hefty portion of a debt you have, go ahead and make that payment!
While it won’t be as exciting as buying something new, how much money is that paid off debt going to save you each month?
For example, if you’re paying $200 a month on your car that only has 6 months left of payments, and you’re a taxpayer who made less than $75,000 last year, you should expect a $1,200 stimulus check (this does not include your spouse or if you have any qualifying children). That means you can pay off your car 6 months early with your stimulus check and save yourself a $200 payment every month!
CFSC Is Offering a Reduced Rate Fee to Cash Stimulus Checks at Participating Stores (this offer is no longer valid)
At CFSC, we’re also doing our part to help where we can.
Participating CFSC locations are currently offering a special reduced rate on check cashing fees for all government stimulus checks. Whether you are a new or a current customer, everyone receives this discount, so share the news so your friends and family can make their stimulus checks go further too! You don’t have to wait for your funds either – no holds!
Call or visit your nearest CFSC to find out if this discount is available near you.
If you’d rather not carry around the cash, you can also load your money onto a prepaid debit card. It’s safer than having cash on you and you can use a prepaid debit card from CFSC anywhere a Visa debit card is accepted. You can even load or unload your cash as needed. Learn more about our prepaid debit cards here.
Whichever way you choose to spend your stimulus check, CFSC is open and available to provide you with a safe place to take care of all your financial needs, under one roof.