Best Ways to Use Your Stimulus Check
October 9, 2020 | Emma Frost
To boost the economy and help American citizens through the COVID-19 financial crises, the United States government has released the first round of stimulus checks. The amount depends on your income level, the number of people in your household, and other factors outlined in the CARES (Coronavirus Aid, Relief, and Economic Security) Act. Generally, it’s about $1,200 for adults and $500 for each child. You may also receive unemployment benefits and some financial aid for your small business owners.
The stimulus check is a welcome relief for many people who have been hit by the COVID-19 crisis. But what is the best way to spend your stimulus check? How can you make it stretch, and what can you do to maximize its benefits?
How To Get The Most Out Of Your Stimulus Package
Pay Off Debt
If you feel you can still manage to pay your monthly bills, put your stimulus check into paying off your credit card debt. However, financial advisors say that you shouldn’t use it for student loans, car loans, or house financing. Instead, contact the bank and ask if you can temporarily pause the debt or negotiate for longer payment terms.
Start An Emergency Fund Account
If you don’t need the money right away, put it into a Rainy Day fund. Financial experts recommend having up to 3 to 6 months of household expenses (including rent, utilities, and food) set aside in an emergency account. Some banks have online savings account with an annual percentage yield of up to 1.70%s
Financial advisors think this is the best option if you are still employed. No matter how “stable” your job seems now, it’s best to be prepared and save the stimulus money for when you really need it.
Start A Business
The smartest way to use money is to grow it. Start a simple business that can help create additional sources of income. Choose something that you can run from your home, and doesn’t require a lot of capital. But don’t throw your money into a vague business idea! Do your research. Check out your competition so you have an idea on the best products or services to sell, and at what price. After a few months, when you see that your business is successful, you can invest more money into it.
If the stimulus check isn’t enough to cover the capital expenses, a title loan can help raise the extra money you need. A title loan lets you use any vehicle – car, truck, motorcycle, SUV, RV – as collateral. It’s a good option if you don’t have a good credit history, or if you need to raise cash quickly. It can be processed in just a few days, as long as you present the needed documents. This includes proof of identification, car registration papers, and car insurance papers. And don’t worry: you don’t have to surrender your vehicle! You can continue to use it as long as you make the monthly payments. Find a title loan near you, and discuss the best payment schemes with a loan representative to get a good deal.
Fund managers say that if you are thinking of long-term investments, you can take advantage of how some premium stocks and equities are down by as much as 32%. Just consult with a good fund manager, and invest small amounts on a bi-monthly or monthly basis so you can keep careful watch of how the market changes.
Open An Investment Account For Your Child
The stimulus package includes $500 for every child. If you are not in great financial need and have other ways of paying off monthly expenses, consider opening an account or 529 Plan for your child. That way, the money goes to protecting your child’s future college fund, and may even be tax-free or have tax benefits.
Help Other People
If you are financially comfortable and stable and do not need the stimulus check for yourself or your family, then pay it forward. Donate the money to people who are in dire need. You can help out family and friends who have been affected by the COVID-19 crisis, give it to a neighborhood food bank or hospital, or choose a charity that helps vulnerable communities.
Pay Your Taxes
It may seem ironic to use government money to pay the government, but at least you won’t panic when the tax deadline comes along. If you haven’t filed or paid your taxes, use the stimulus check to cover what is due.
Use your stimulus check wisely!
Don’t spend your stimulus check on frivolous things. Look at your budget, your overall financial situation, and set your priorities. It is uncertain when the next round of stimulus checks will be released, so try to find the best way to use the money now so that it will most benefit you and your family.
If You Still Need Help With Emergencies, Turn To Title Loans
As much as your stimulus check can help, there are still emergencies where you need help. When those arise, Arizona offers you the best title loans AZ has to offer in order to help. A title loan is a loan you get when you use your vehicle’s title as collateral. If you are approved, you can qualify for anything between $300 - $15,000. And if you are asking “where can I get a title loan near me?” you are in luck. You can either get your title loan through our many Arizona stores or we can come to you.