Did you get some stimulus money? How are you planning on using it? Here are some SMART ways to use your stimulus money.
Our stimulus money just hit our bank account, and wow! Whatever your fears regarding inflation or government overspending, etc., it sure is nice to get some extra cash deposited into your account. This will help so many people pay their bills and give a bit of breathing room to so many, including me.
We need our stimulus to pay some bills. We have been luckier than many people during this pandemic, but we still are struggling. This check’s timing came at a perfect time as it is almost Passover (and there are so many expenses to deal with!)
We used our stimulus money to give some to charity, add to our Life Happens fund, and the rest is for Passover expenses. What are you doing with yours?
For those of you who don’t need your stimulus money to pay for basic bills and a roof over your heads here are some smart money moves you can make with your stimulus money!
11 Smart Ways to Use your Stimulus Money:
- Give to Charity. I give 10% of all my income to charity, and that included this money. When we are lucky enough to get “extra money,” I try to remember those who are even in more need than us. I believe that you should use your money to help people. That means that you have a moral obligation to help people who are less fortunate than you. This involves giving charity to those who need it. If you can, give as much of your stimulus as possible to the people who need it the most.
- Pay off Debt. If you have a lot of debt then paying off a chunk of it can help you climb out of debt sooner and perhaps lower your monthly payments as well. Tackle the debt that is the most predatory (or weighing on your mind the most). Then you can decide whether to pay off the highest interest rate first or pay off some smaller debts in the avalanche method.
- Start Saving $1,000. Saving $1,000 is a gamechanger. Many Americans do not have that kind of money put away. Do this, and you will be ahead of the game. Your financial future will change. (Need inspiration? Join the $1,000 Savings Challenge)
- Stock up your Life Happens Fund (aka Emergency Fund). I love having a fully-stocked Life Happens fund, even though it does not stay fully-stocked for long. 3-6 months of expenses for your Life Happens (aka Emergency Fund) is the suggested rule of thumb, but obviously, this should be tailored to your particular circumstances and risk tolerance. Having an emergency fund is one of the smartest things you can do for your continued financial stability.
- Save for Retirement. You can’t use your stimulus money as earned income, so you cannot put it into accounts where earned income is required (i.e., Roth, etc.), but you can use other money to fund those accounts and “pay yourself back” with the stimulus money. Choose the best retirement account for you and get started! Don’t forget: the earlier you start saving for retirement, the better off you will be!
- Invest Your Money. Take some of the stimulus money and invest it. Index funds are a crowd favorite and are generally not incredibly risky. If you are brand-new to investing and unsure how and where to start, check out this straightforward guide on How To Invest Money Like A Boss (8 Steps To Start Investing).
- Invest in Yourself. Take a course. Hire a mentor. Buy a book. Go back to school. Take some money and invest in the most important person: yourself. The dividends will be worth it! If you need some ideas of the best ways to invest in your mind, body, and soul then read this: 20 Meaningful Ways to Invest in Yourself.
- Save for Your Kids. Whether you decide to start or contribute to a 529 or save for your kid’s future in another way- put some money away for your kids. They will thank you for that foresight one day! (Well, hopefully!) Setting up your kids for a financially stable future is one of the best gifts you can give your family.
- Buy Something That will Save you Money. There are times when buying something more expensive can save you money in the long-haul. This is a problem for poor people that they often can’t afford an initial purchase to save them money. Some examples include a good computer, a second freezer for storage, an instant pot, etc. I’m sure you have many ideas! Take this “extra money” and buy one of these items to help you save more money later.
- Future Budget Planning. Do you have any big expenses coming up? A baby on the way? A car about to break down? A lease that is ending? Start Future Budget Planning and put some money away to prepare for these exciting yet expensive life events. Being prepared for life’s financial adventures means that they won’t catch you off guard.
- Improve your life. Is there something that you want or need that can improve your life? Money is a tool that can and should be used to improve your life and make your life easier and better. After all, what is the point of money if we cannot spend it? Do your best to support small businesses that can use the infusion of cash and shop responsibly. You will be helping the economy grow and helping a store owner as well. Win-win!
This latest round of stimulus checks will be helping a lot of struggling people. If you qualified and are not struggling day-to-day, you can still use your check to make good financial choices for you and your family. What are you planning on doing with your check?