President Trump signed a $2 trillion economic relief plan that will provide millions of Americans with a stimulus check. The Coronavirus stimulus check will provide each adult $1,200, and an additional $500 for every qualifying child age 16 or under. As a single person, your AGI cannot exceed $99,000 and as a married couple, it cannot exceed $198,000 – married with children, your AGI cannot surpass $218,000.
This is the one social program that most Americans can benefit from and desperately need as unemployment has skyrocketed. If you filed taxes this year or last, the government will utilize that same direct deposit account – this should get payments out sooner than later. But that begs the questions, what should you do with your coronavirus stimulus check?
It’s easy to think of things to buy, but in times like these, you need to think of the future and not the present. No one knows how long COVID-19 will impact the world, nor the economy, which in turn affects your livelihood and your ability to work. I am a half-empty type person and in a situation like this, it benefits me greatly because I don’t see the light at the end of the tunnel anytime soon. So grab your pessimist hat and join me! We must plan for the contingency that coronavirus will still be affecting us for the next few months and thus, you should save your stimulus check for even harder times.
Saving your coronavirus stimulus check in an emergency fund or savings account is one thing you could do. Even though high-yield saving accounts are offering abysmal interest rates due to fed cuts, they’re still higher than your average savings or checking account. This would be a great place to plop your coronavirus stimulus check until you absolutely need it.
Pay off Debt
Another option is to use your coronavirus stimulus check to pay off or pay down debt. There are two methods to paying off debt made popular by Dave Ramsey:
The avalanche method will help you pay less in interest and get you out of debt quickly by focusing on the highest interest rate debt first. The snowball method focuses on paying off debts in order of smallest to largest amount – not accounting for the interest rate. They both have their advantages and disadvantages. But, if the stimulus check can pay off at least one of your debts completely – that might be a huge win for you and alleviate stress in uncertain times.
Already have an emergency fund and zero debt? – invest your stimulus check! Stocks are at a discount right now and experts suggest, they could fall even further before this is all over. I am a huge fan of dollar-cost averaging – which is the strategy of not trying to time the market, but instead, just feeding into it consistently.
If you haven’t started a Roth IRA or maxed it out for the year – I recommend that be your first option before contributing to a taxable account. If you’re unsure how to invest, I recommend starting an account with Robinhood or M1 Finance – both are free – and looking at ETFs which provide instant asset allocation and diversification – the most important methodologies to investing.
New to Investing? >> How to Invest Guide
If you don’t need the money, there is no option to return it. Instead, you can donate it to your favorite organization, GoFundMe, or Kickstarter. Some organizations that are receiving donations include:
- The American Red Cross – supports Americans during disasters and pandemics
- Meals on Wheels America – delivers food to the elderly
Those are only a few organizations and there are so many more to choose from! Find one that means something to you and find out how you can donate. If you’re unable to donate money, you can always donate your time or blood.
Hopefully, you found this article helpful and were able to decide what to do with your coronavirus stimulus check. Whatever you decide to do, just prepare for the inevitable that this could last longer than anticipated.