6 ways to get the most out of your coronavirus stimulus check
Thanks to the $2 trillion coronavirus stimulus package that Congress passed late last month, millions of Americans have started receiving one-time cash payments from the government
Single taxpayers and those who file as head of household are getting up to $1,200 each. Married couples who file jointly receive as much as $2,400, and households with kids qualify for an additional $500 for each child.
For many Americans, the stimulus checks and direct deposits make up for some income lost during the pandemic and will go toward monthly expenses. But if you're still working and are doing OK, you might use the windfall as an investment in your future.
Here are six smart ways to do that.
1. Help the planet while you save for emergencies
Always have some money for an emergency.
Most financial advisers recommend that you put aside enough money in an emergency fund to cover roughly six months of your normal monthly spending. As you save for your own uncertain future, why not make an investment for future generations?
You can do that by using your stimulus payment to open a cash management account with this company that provides ethical and sustainable financial services designed to help protect our planet.
Every time you make a purchase, they'll round it up to the nearest dollar and use the extra money to plant a tree. You’ll also earn cash back on every purchase, and get extra rewards for shopping at environmentally friendly stores.
Best of all, the accounts offer interest rates up to 100 times higher than you'd get from the big banks, so trees aren't all you'll be growing. Your money will grow, too.
2. Pay off some debt
Try to get your credit card debt down.
If you already have an emergency fund in place, you might want to use your stimulus check to pay off some of your debt instead.
It’s a good idea to start with your credit cards because they usually have the highest interest rates. Using your relief payment to take a chunk out of your credit card bill could save you a bundle in interest, especially if you’ve just been making the minimum payment each month.
You also could use your stimulus check to pay off some student loan debt. But before you do, check to see if you might be able to refinance your loan at a lower interest rate.
Use a company that lets you compare your refinancing options for free to help you find the best deal. That way your stimulus check will go further, and you’ll be able to pay off your loan in a shorter amount of time.
3. Protect your family
It's a good idea for a life insurance policy.
As the coronavirus pandemic has shown us, life sure can be unpredictable. If you want to make certain your family will be financially secure if the unthinkable happens to you, consider using a small portion of your stimulus money to open a life insurance policy.
These days, getting life insurance is incredibly simple.
You can use a free online service that within minutes will find you three customized rates to fit your family’s needs. Depending on your age and location, you may be able to get $1 million in coverage for as low as $7 a week.
That’s a small price to pay for your family’s protection – especially if the government is helping foot the bill.
4. Save for your retirement
Keep thinking about the future.
If you don’t mind stashing away some – or all – of your stimulus check for the long haul, putting it into a retirement fund is a great way to invest in your future.
Creating a retirement plan on your own can be complicated, but there are companies that can connect you online with a certified financial planner (CFP) who will take care of everything for you.
Your CFP will build you a personalized retirement plan based on your specific financial goals and needs.
With the help of an online CFP, all of your correspondence is done electronically or over the phone. That means you can work on your plan for your golden years even as you’re stuck in your house, social distancing.
5. Invest the money in the markets
Although the stock market still seems a bit shaky right now, this is actually an excellent time to snap up high-profile stocks at ultra-low prices. Investing your stimulus check properly could wind up paying huge dividends in the future.
You don’t need to be an experienced investor to take advantage of stock market declines; robo-advisors, or automated investing services, make investing quick, easy and stress-free.
Most robo-advisors offer a wide variety of investment funds to choose from, so you can invest your stimulus check at a risk level you feel comfortable with.
They’ll also automatically adjust your portfolio based on changes to the market, which means you won’t have to worry about whether you’re making the right moves.
6. Shop local
Support local business.
It’s no secret that small businesses have taken a huge hit since the start of the coronavirus pandemic. If you want to help your local economy get through this difficult time, use part of your stimulus check to support it.
Do your grocery shopping at independent markets rather than big box stores, even if it’s a bit more expensive.
Order food from a variety of places in your neighborhood instead of just sticking with your favorite chain restaurant.
And, if possible, donate some of your relief payment to local nonprofit organizations to help out the less fortunate in your community or frontline medical workers.
