Once you get your stimulus money, you will want to use it wisely. There is no right answer for everyone, and it will depend on the specifics of your financial situation. That said, there are some good guidelines you can follow in making your decision.
Meet your basic needs
You will want to ensure your basic needs, like food and shelter, are met. If money has gotten tight and getting enough food has been difficult, it may be wise to use the money toward your food budget. Shelter is also essential, so you should consider paying your rent or mortgage. Yes, there is significant housing relief in place for most of the country. The CARES Act imposed a 120-day eviction moratorium on many federal housing rental programs, and many state supreme courts have issued orders pausing evictions. The CARES Act also provides a 180-day mortgage forbearance. That said, housing is essential. And even though there is some temporary support allowing you to miss payments, you will have to pay them back eventually. It may be wise to use your stimulus check to prevent falling behind in the first place. The same is true for utilities. While many states are ensuring that utilities are not shut off due to an inability to pay, you may want to pay yours each month if you can, to keep from falling behind later.
Putting the money into your emergency fund is also a wise move. Maybe you have already taken some out of your emergency savings due to COVID-19. If so, the stimulus money may give you a chance to replenish. Or, maybe you can pad your savings even more given the uncertainty that lies ahead.
If you rely on your vehicle to get to work, you will want to make sure that you do not miss payments and risk it being repossessed. You may call your lender to see how it can help with alternative payment plans, and you may consider putting some of your stimulus funds toward this expense.
Credit card debt
If you have credit card debt, your first move should probably be to contact your creditors to inquire about the arrangements they can make to get you through this time. Assuming you have met your basic needs and have an established emergency fund, it might make sense to use some of your remaining stimulus funds toward these debts.
Again, determining exactly how to use the stimulus money will come down to the specific situation you are facing. If you would like personalized help in determining the best way to move forward – WE CAN HELP! Contact one of our Credit/Housing Counselors today at 712-252-1861 ext. 47! We’re able to assist you for FREE.