3 tips for spending your coronavirus stimulus check
Updated on April 30, 2020
Those who qualify for a stimulus check as mandated by the $2 trillion economic stimulus package signed into law last month may have already received funds. The $1,200 to $4,000 that you receive from the federal government, however, should not be used frivolously. Consider these tips before spending your coronavirus stimulus check.
1. Strategize First
$1,200 is a lot when it is added to what you normally earn in a month. Such an amount for a single person, however, may not be as much when you have significantly reduced income or no job at all. It is important in such cases to strategize by highlighting the necessities first. You need food to survive and the utility bills are necessary to live comfortably.
Most utility companies are willing to work with customers during the coronavirus pandemic. It is, therefore, crucial that you communicate if you cannot pay all of your bills in full. Medical supplies should also be considered as crucial in the instance that you become ill. Credit cards and personal loans should come last on the scale as there are deferment programs available to help you remain in good standing during this pandemic.
2. Create A New Budget
The budget that you normally follow may not be sufficient during this unprecedented time. Creating a monthly financial plan that clearly outlines what you have available, instead of how much you ordinarily earn, is the best way to avoid overspending. A budget may also help you cut back on subscriptions that you do not need so that you can make the most of your $1,200 stimulus check.
One thing that you can leave out of your new budget is your monthly student loan payment. The CARES Act has automatically placed millions of loans owned by the federal government in administrative forbearance. You, in other words, do not have to make payments on your student loans during this time.
3. Start An Emergency Savings Fund
Those who have money left over after paying the bills may want to consider using the additional funding to establish emergency savings. Setting aside just ten percent of your monthly earnings to build the funds can lend favorable results.
Emergency savings is especially beneficial during the coronavirus crisis since it is unclear as to how long the situation will last. You may need to rely on the funds to pay essential bills down the road.
Your coronavirus stimulus check is not for lavish spending. You need to strategize and plan how you will make the funds last.