What to Do With Your COVID-19 Stimulus Check

Stimulus for the rich

April 15 is the infamous annual tax due date… at least in years where there isn’t a crazy global pandemic throwing everything into chaos. This year, April 15 is the date the government pays you, with an estimated 80-million direct deposits going out by the end of the day. If you usually get your tax refund as a direct deposit, there’s nothing else you need to do—assuming you qualify for the stimulus, you’ll see it in your bank account (assuming the system works).

Over the next few weeks, Americans who aren’t set up to receive direct deposits will receive a paper check version of the stimulus, just as soon as the IRS can accommodate our Commander-in-Chief’s odd (and potentially illegal) last-minute decision to add his name to the checks.

But it seems with free money comes great responsibility, as there’s a lot of debate in our stir-crazy country about what to do with these checks. We’re here to help you out. Just follow this guide and you’ll know exactly what to do.

If You Need to Spend it on Necessities

It’s estimated that one in four families in the USA today lives paycheck to paycheck, meaning that this is the biggest percentage of stimulus recipients. If you’re part of this silent majority, your responsibility is to spend the stimulus money on necessities. Rent or mortgage, medicine, utility bills, food, diapers, whatever it is—if you need it, pay for it. 

The hardest decision for this contingent is which necessities to prioritize. $1200 per taxpayer isn’t much, and if you’ve lost your regular income and are waiting for your unemployment benefits to start, you’re going to have to figure out how to stretch this money as far as it can go.

Start by figuring out what you can avoid paying for—some mortgage lenders are offering deferred payments if you call them up and state specifically that COVID-19 is preventing you from making a payment. Some landlords are similarly willing to offer leniency. Utility companies won’t shut off your services on one missed payment. Credit card balances accrue interest, which is never good, but it’s a better option than skipping out on vital medication or baby formula or any of the other things you need to survive. 

It’s hard to assume that you’ll see another stimulus payment from the government, so make this money go as far as it possibly can for now.

If You’re Still Earning a Paycheck and See This as “Extra”

First, congratulations. Over 16-million Americans have lost their jobs in the past few months, so consider yourself lucky. But don’t consider yourself safe. Unemployment projections predict that we’re going to continue seeing millions of people lose their jobs each week, and that overall unemployment levels will soon be at the highest we’ve seen in almost 100 years.

And we have yet to see the light at the end of the tunnel.

So, if you can afford to put this payment away in a savings account and save it towards future emergencies, we highly recommend doing so. Just because you’re working today is no guarantee that you’ll be working tomorrow, or that your salary and hours won’t be cut to help your company stay afloat while the world economy swirls in chaos. Sorry to be the ones to break that to you.

If You Really Don’t Need the Money

Okay so let’s say your annual income is low enough to qualify for the stimulus check, but maybe you’re independently wealthy and you have enough money saved up to not work a day again for the rest of your life if you chose. First off, congratulations. Betting it all on the 2011 Cardinals was a smart move, even if it hurt your soul to do it. Second off, do something smart with this money as well.

Maybe you have a friend who works in the service industry, or in retail, or hospitality, or one of the other workforces that are being hit the hardest by this economic disaster. Give the money to them. You don’t need it, and you didn’t have to do anything to get it, so why not do something nice for someone else? 

Maybe you know an independent shopkeeper who is struggling to keep their business open during all of this, or you just want to make sure your favorite store or restaurant is still there when all this is over. Buying $1200 worth of their stuff right now might help make that happen.

You’re in a unique position here. Having a fat savings account right now is sort of like having a wooden door at the end of Titanic. Except you know there’s room for two on it.

If you’re still deciding what to do with your stimulus check, don’t hesitate to make plans with a qualified financial advisor. They can help you decide how best to use your money—from a safe social distance.