President Trump signed the CARES (Coronavirus Aid, Relief, and Economic Security) Act on March 27, 2020. This basically means that the US government will allocate $2 Trillion to help individuals and businesses during this pandemic.
One of the provisions of the Act is that majority of the people in the US will get $1200 (for individuals earning $75,000 and below per year), and $2400 (for married couples earning $150,000 and below per year) + $500 per qualifying child. The provision will phase out at $99,000 for individuals and $198,000 for married couples.*
The big question is, how are you going to spend your stimulus check?
I have a few ways and suggestions on how you can spend it:
This is not per se a “spending,” but saving is a priority. Nobody knows what the future holds. How long will this pandemic last? Bulk up that emergency fund. You need to have cash when you need it. In this time of economic turmoil, cash is king.
If you haven’t already, stock up on your essentials – perishables and non-perishables. It’s good to plan for at least a month worth of supplies. After spending a portion of your stimulus check on groceries, save the rest.
Pay your debt, but at just a little above the minimum. If you haven’t already, call your banks, credit cards, and mortgage companies and ask what kind of help they are extending to their customers during this pandemic. This is the time to be proactive. Again, we don’t know how long this will last. Conserve every cash you can.
If you have savings, good amount of food supply and other necessities, and don’t have debt, you might want to consider investing your money. This is the best time to invest – when the market is down; when the prices of stocks are down. Buy low, sell high. It’s a golden opportunity and it might be years again before this happens. If you are interested in investing, I can recommend three brokerage accounts because I use them: Etrade, Ameritrade, and Robinhood. Of course, you have to do your own research as to what companies you should invest in. As my professor in Auditing would say, don’t invest in something you don’t know about.
I hope you spend your stimulus checks wisely. And I also hope that this pandemic ends soon. Until then, flatten the curve, stay home, stay safe, and be healthy.