Where’s Your Stimulus Check Going?

Last week, the IRS started distributing the latest round of stimulus checks in an effort to help people and families who have been financially impacted by the Coronavirus pandemic. 

The reality is, not everyone who receives these checks has experienced covid-related financial hardship. If you’re not making up for lost income with yours, you may be wondering, “What should I do with this stimulus check?”

Before you blow it on a shopping spree or plan a lavish vacation, here are a few smart money moves you may want to consider first:

  • Pay down your debt. Use your stimulus money to reduce what you owe on credit cards, car payments, or even your mortgage. Less debt means fewer payments. And that means you get to keep more of the money you work so hard to earn and put it to work for you.  
  • Fund a Traditional or Roth IRA. You’ve probably heard the tax filing deadline has been pushed back to May 17. What you may not know is that you can also make 2020 contributions to IRAs and HSAs up to that new filing deadline. Even if you’ve already filed your 2020 returns, you may still qualify to fund a Roth IRA or HSA. 
  • Save for a rainy day. You may be walking on sunshine financially right now. But one thing is sure—sooner or later, it will rain! Unexpected expenses pop up, and it never hurts to be prepared. Use your stimulus check to kick off or contribute to an emergency fund of 3-6 months’ worth of expenses for a sturdy umbrella of protection. 
  • Help fund college for your kids. Coverdale ESAs and 529 Plans are just a handful of ways you can put money away for your child’s college education. Using that stimulus as an investment in your child’s future career and life will be money well-spent! 

If you’d like advice on any of these stimulus check strategies, we’re here to help! Our team is happy to advise you on your best next steps.

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