The COVID-19 pandemic has necessitated a stimulus package for certain families within the American system to improve their economic power. With the US President signing an unprecedented $2.2 trillion relief towards the end of March, many homes will be rewarded with a $1200 stimulus check for adults with additional $500 for every dependent child in such household. This has necessitated people to ask a very salient question; what should I do with the relief check?
Various financial advisers have provided answers to this question severally;
- Open an emergency fund account
Placing the money in an emergency fund account would be ideal. Emergency fund accounts carry a high yield interest on savings. This option is for those who are sure that they would not be laid off anytime soon. This is a time to have a contingency fund that would improve significantly over the period of a year. This would take care of any unexpected issue in future such as job loss or stock market crash.
- Pay your debts
The good thing about the present situation is that people are staying at home more; hence there is lower level spending across all boards. For families that have their basic necessities covered, the stimulus check may be used to settle old high-interest debts. This may be credit card debts or any other high-interest loan that has been collected in the past. by doing this, you are reducing your indebtedness greatly.
- Invest in equity
If you have been able to settle debts and other basic needs, the stimulus check may be put into better use by investing it. For those who love long term investment, the ideal thing is to carefully evaluate the companies that are benefitting greatly from this pandemic – grocery stores, e-sports and the likes. You won’t go wrong by putting your stimulus check securely in the hands of such organizations.
- Give to Charity
Although not everyone will rationalize this, this is really a time to show that you care for the needy if you are comfortable without collecting the stimulus check. A reasonable number of charities are out there fighting this pandemic. It would be a great service to humanity to donate to this honorable cause. Who knows just how far this little donation will go to save mankind?
- Take up a 529 plan
You can as well make this money be of great value to your kids’ future by investing in a 529 plan. Although, you may be thinking when exactly are schools going to be open. However, one thing is sure; you will still have to pay for tuition when such happens. Think of it that the more you invest money into the 529 plan, the lesser your propensity to borrow in students loans in the future when school eventually opens.
Now that you have been given a series of options to pick from, you should not sound confused when you stimulus check eventually arrives.