Home > Credit Tips with Tiff > Credit Tips with Tiff: What Should I Do with My Stimulus Check?

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Dear Tiff,

I have two questions. Firstly, I’m still waiting for my stimulus check. Will I get one for sure? Secondly, I’m not really sure what to do with my stimulus check once I get it. I feel very fortunate because I don’t need the money to cover rent or any other essential purchases. And I don’t have any major bills to cover. Do you have any suggestions on how I should use my stimulus check?

Checking for My Check

Dear Checking,

I know there are a lot of people eagerly awaiting a stimulus payment—officially called an economic impact payment. While some people have gotten theirs already, other people might be still be waiting.

A quick way to check your stimulus check is by going to the IRS’s website. The IRS has created a portal where you can check the status of your economic impact payment. They also have a tool that can help you update your information online to allow for a direct deposit payment instead of a check, if you haven’t provided direct deposit information with your taxes in the past.  

If your income changed from 2018 to 2019 and you haven’t filed your taxes for 2019, don’t worry. The IRS made an easy online tool for non-filers to use to get their stimulus check. 

How to Spend Your Stimulus Check

Before you decide how to spend your check, make sure to take a good look at your financial situation. I’ll give you some suggestions, but only you can decide what the right financial move will be. And just because something works for you, doesn’t mean it’ll work for someone else.

Now that we’ve gotten that out of the way, let’s dive in! There are a ton of options out there, so it all depends on your financial goals.  

Donate Your Check to Charity

I’m so happy to hear that you’re doing well financial-wise! As you probably know, there are a lot of people out there who are struggling in our current economic climate. 

So if you feel like you’re financially secure, and you want to do something to help those who aren’t, you could donate your stimulus check to a charity dedicated to coronavirus relief. Here are a few:

If you want to take a look at other charities or funds to donate to, you have plenty of options. But a quick word of warning—unfortunately, there are some people who take advantage of others by creating COVID-19 charity scams. So before you donate to a charity, do some research and make sure it’s legitimate. The CDC and local Public Health Departments have lists of related charities available as well.

Put Your Check In a Savings Account

Sure, you might be doing pretty well right now financially. And I hope things will stay that way! But the reality is that, especially when we’re in the middle of a global pandemic, things could change pretty quickly. To prepare for any unexpected expenses that could pop up, you might want to put your stimulus check in your savings.

If you have a savings account with a great interest rate, I suggest putting your stimulus check there. But if your savings account has a less-than-ideal interest rate, it might be worth taking a look at a high-interest savings account. These accounts give you a higher interest rate than your typical savings account.

Help Keep Small Local Businesses Running

As you probably know, there are a ton of small businesses that are struggling right now. Sadly, stay-at-home orders mean a significant dip in customers for businesses. Luckily, there are a few things you can put your stimulus check towards to help support small businesses at home. Here are a few ideas:

  • Buy a gift card. Whether it’s for a little boutique, a local nursery or your favorite music store, you can grab one of their gift cards. Most stores offer them online, but if they don’t, you could call to see you can purchase one over the phone. Keep the gift card for yourself or pass it off to a friend for a birthday. 
  • Order takeout. Thanks to apps like Grubhub, Uber Eats and DoorDash, you can still enjoy your favorite restaurants without leaving your apartment. Honestly, what would we do without technology? 
  • Don’t cancel appointments—reschedule. It can be tempting to cancel any future appointments right now. But canceling them completely means that your local hair or nail salon loses guaranteed income. So instead, reschedule them for a couple of months out. If you’re still quarantined by the time the appointment rolls around, you can reschedule it again.
  • Keep your eyes peeled. A lot of small businesses are coming up with creative ways to stay in business. Make sure to follow your local businesses on social media to keep track of their promotions or offers, or just contact them directly. 

Use Your Stimulus Check to Invest

If you want to use your stimulus check to prepare for the future, you might want to look into investing. While the stock market has certainly seen better days, there are other ways you can invest. Here are some ideas:

  • Contribute to your 401k. It’s never too late to start preparing for retirement. That’s where your 401k comes in. Putting your stimulus check towards your 401k is a great way to get ready for your future. Plus, if you need that money now instead of later, you can make a withdrawal
  • Start an individual retirement account. If you’re looking for investment options beyond a 401k, it might be worth looking into an individual retirement account, or IRA. An IRA will give you more investment options than a 401k. You could have an IRA anda 401k, or you could use your IRA to replace your 401k.

Like I said, take a look at your finances before you make your next financial move. And don’t forget to plan for the future! I hope you and your family are staying well and surviving quarantine.

Stay well,

Tiff

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