4 Ways to Use Your Stimulus Check Wisely

The much-anticipated economic impact payments, or stimulus checks, have begun to arrive in bank accounts or in the mail. For some, these checks will mean that they can make a mortgage payment or keep the lights on. But for others, who are still working, the stimulus money might represent an opportunity.

One of the following four actions might represent a wise choice for you, as we all prepare for both the short- and long-term future ahead of us.

Pay off a debt. If you’re carrying credit card debt, stretching out those payments over time will only result in hundreds or even thousands of dollars spent on interest. Pay off your highest rate debt, and you will find yourself breathing a sigh of relief. Plus, it’s always a good idea to plan for a debt-free retirement if you can.

Prepare for another crisis. Many were lucky enough to keep their jobs through the coronavirus crisis, but life has a way of throwing us unexpected curveballs. Stashing your stimulus money in a savings account could help you weather the next storm, whether it’s another pandemic situation, a leaking roof, or some other challenge.

Donate to charity. Perhaps you’re feeling fortunate to have survived this crisis relatively unscathed, and you’d like to “pay it forward”. A charitable donation can provide a valuable income tax deduction for those who itemize their taxes. Just remember to check with the IRS to be sure your chosen charity is on their list; otherwise, you can’t claim a deduction and might even give money to a fake organization.

Stash it in a retirement account. Are you making the maximum allowable contribution to your retirement account each year? Have you considered opening a second account, such as an IRA? This might be the perfect time to step up your retirement savings strategy.

If your company offers matching contributions, you could effectively double your stimulus money!

If you have questions about your retirement savings strategy, or any other questions related to your financial situation, remember that we’re here for you. Give us a call, and we can discuss your strategy and help you decide upon your next move.