The pandemic has affected everyone differently. Many people have been financially devastated. Others have found it a boon to their bottom line. Still others have barely noticed a difference, their careers easily transitioning to an at-home position that required adjustments in lifestyle but not in spending.
With the passage of the American Rescue Plan Act of 2021, many Americans will receive a third stimulus payment in the coming days. Here are some ideas on how to use it.
If you’ve been negatively economically impacted by the COVID-19 pandemic:
- Catch up on your bills. Take care of your family’s needs first – housing, food, and utilities are your top priorities. If those things are secure, apply the money toward other bills that have fallen behind.
- Save it for future expenses. If you’ve managed to stay afloat but fear that you may soon fall behind, tuck the money away for use when you need it. Put it in a savings account where you can access it when you need it, but don’t keep it in your checking account where you’ll find it too easy to spend.
- Plan for summer childcare. Summer will be here before you know it. Sign-ups are already happening in most places. Pay for your child’s daycare or camp spot so they’ll have a place to go this summer and you can continue working; that way you won’t fall even further behind.
If you haven’t been negatively affected financially, but you lived with a sense of financial insecurity pre-pandemic:
- Use the money to pay down debt. The more debt you pay off, the more of your paycheck you get to keep going forward and the more you’ll be able to get ahead in the future.
- Boost your emergency savings. If you’ve got money in the bank for emergencies, you’ll no longer need to put unexpected expenses on credit cards. Improve your sense of financial security by setting aside money for future emergencies.
- Make needed home or auto repairs. Some home or car repairs can wait. Others do more damage the longer you put them off. Prevent future financial loss by making critical home repairs (or auto repairs if you rely on your car to get to work).
If you feel like you’re on solid financial footing:
- Give it away. This is unexpected money that, at its core, was intended to help our economy and those who are in dire financial straits. If you don’t need it, consider giving it away to someone that has experienced financial devastation during this pandemic. Help a friend catch up on their rent or mortgage, pay for a month (or three) of childcare for an essential worker who’s struggling, or donate it to a charity. Food banks are in particular need right now due to high demand.
- Support the local economy. Get weekly takeout from your favorite family-owned restaurant. Hire a local shop to do a needed home repair. Buy birthday gifts or home decor from a small, independently owned shop in your hometown. Enjoy the windfall, but use it to spread the love to those who have felt a significant economic impact.
- Use it towards the future. Open college savings accounts for your kids, or make a lump sum if they’ve already been established. Add to your retirement account. Put it in savings toward that new vehicle you’ll need in a few years. Pay down your mortgage to save on long-term interest. Use the money in a way that’s wise and will benefit your family for years to come.
Stimulus payments feel like a windfall, but it’s easy to accidentally spend the money if you don’t have a plan. Be intentional about how to want to spend it, and once it hits your bank account don’t let it sit there for easy access. Either tuck it away in savings until you’ve figured out how you want to use it, or send it to your desired destination right away. Use this money in the way that will best secure your family’s stability and future financial security – and maybe even use it to bless other people.
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