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In March President Trump signed a $2.2 million relief bill allowing people to receive $1,200 in a stimulus bill. Unfortunately, let’s say some individuals are buying things other than food. Braydyn found six tips on how to spend your stimulus check right.
On March 27, President Donald Trump passed a $2.2 trillion dollar relief bill to take aim at the financial impact from the coronavirus. The bill includes a $1,200 stimulus check for adults and a $500 check per dependent child.
Those individuals with a gross income of $75,000 or married couples that make less than $150,000 will receive the full amount. Those earning more will see a reduced check based on their income.
The IRS said it will use taxpayers 2018 or 2019 returns based on which ones have been filed. During an April 13th Press Briefing, U.S. Treasury Secretary Steven Mnuchin said 80 million checks will be sent electronically and on April 30th President Trump tweeted that 120 million Economic Impact Payments will be shipped out.
Which brings the question of how will some people spend this money? According to a recent survey from a Chicago-based auto insurance startup called Clearcover, it showed that people plan to budget their money towards bills, groceries, streaming services, and video games. Another survey from Cowen and Company displayed people planning to spend money on food.
The data collected by Current, a digital banking service which has given 16,595 of their customers accounts with stimulus payments discovered the highest categories of stimulus spending was in takeout and delivery food. Adding to the Current survey “Forty-five percent of their customers stimulus checks have been spent.”
The New York Post reported some people ghastly spent their checks on dildos, guns, and stripper poles among many other atypical items.
Bringing us to another question, what is the most appropriate way to use your stimulus checks? The website CNET gave six tips on how to rightfully use your stimulus to benefit yourself and others.
Number One: Take care of your immediate needs
The websites said “Above all else, make sure your immediate needs are met. This includes food, monthly bills and rent or mortgage. But before you prioritize rent over, say, food, consider that many jurisdictions, utility companies and even banks are offering relief due to the outbreak.”
Number Two: Pay Your Taxes
The U.S. Government has extended Tax Day from April 15th to July 15th. Those who have not filed taxes and will owe government money can use the stimulus check to cover that tax payment.
Number Three: Reduce Your Debt
A way to secure a financial future is to reduce your debt, a significant payment made to pay down a credit card and loan will help reduce the amount of interest paid on an account carrying a balance. The less interest you have to pay the more funds you can keep for the future. Before you do so, check with debt holders because some holders offer relief, including deferred payments, and waived interest. One more thing, make sure to read the fine print because some of the assistance offered can delay interest.
Number Four: Start and Add to an Emergency Fund
It is crucial to start an emergency fund, especially with the coronavirus outbreak. The world could change fast and the fund should be equal to the amount of money spent on expenses for three to six months. If the $1,200 doesn’t cover the amount it can be a starter.
Number Five: Give to Those in Need
If you might be fortunate enough to donate money. With fighting the pandemic many hospitals, food banks, charities, nursing facilities, and churches greatly need your help. Another consideration for the stimulus, help out a neighbor, family member, or friend hardest impacted by the virus.
And finally…
Number Six: Open a Long Term Investment Account for your children
Part of the stimulus package provides an additional $500 per child. If your family is already comfortable, there’s a way to make use of that money to help your kids’ future. Certified financial planner Marguerita Cheng suggested starting a 529 plan with your child. A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. He suggested if you needed help just contact your local bank or investment firm to see what is available.
For WFHB, I am Braydyn Lents and stay safe.
