4 Smart Tips on How You Can Use Your Stimulus Check
The federal government passed a $2 trillion stimulus bill to help relieve millions of Americans of financial burden due to the COVID-19 pandemic. The stimulus bill provides lump sum payouts that will be released this week. Individuals can receive up to $1,200; couples who file joint taxes can receive $2,400. Families with children under the age of 17 can earn $500 per child.
The stimulus checks are being released this week for those who have their direct deposit information on file from their 2019 or 2018 tax forms. Paper checks will be mailed to those who do not have their direct deposit information on their tax file.
It's vital to use the stimulus check to benefit your financial future. If you are receiving a stimulus check, here are four ways you can use your money effectively:
The stimulus check is like “free money,” so it’s best to use it toward paying for necessities such as paying rent, groceries, clothing, or cleaning supplies.
Pro Tip: Last week’s Culture Meets Money guest Sierra Howard founder of I Don’t Do Budgets told our viewers about the company Billshark, that services people by negotiating a lower bill payment on the customer's behalf to help save them money, time, and stress.
Shrink Your Debt
Pay down any liability you may owe to help decrease your debt. Several companies are offering to waive fees or reduce your monthly payment. Federal student loan payments are suspended through the CARES Act, and there are no financial penalties and no accruing interest until September 30, 2020.
Pro Tip: Contact your lender to see what financial options are available to help you best navigate your debt payments. Any suspensions on your payment will be a great time, if you are financially able, to pay down your debt much faster with little to no interest.
During the COVID-19 pandemic, health insurance is more important than ever. You want to feel financially secure in case you might have to visit the hospital unexpectedly. Pay for health coverage now so that you can avoid any high medical bills if you were to visit the emergency room or doctor's office without any health insurance.
Pro Tip: Many health insurance providers are affordable. Be sure to compare rates on 2-4 different providers to ensure you are getting the best possible deal for yourself or your family.
Add to your savings account (or emergency fund)
The number one cause of stress among Americans is money. When you are prepared for financial surprises like losing your job or unexpected medical expenses, this will dramatically reduce your stress and help you to feel better about your financial situation.
Pro Tip: Automate your savings with a specific amount of money each time you get paid. Start small and build your savings habit slowly. Save 1% of every paycheck. For motivation purposes, change your savings account label to “Building My Wealth” or another title that will help you to stay the course.