Since April 11th, many Americans have seen the government’s stimulus check of $1200 hit their bank accounts as a form of financial relief amid the COVID-19 pandemic. Granted by the administration with the hopes of stimulating the economy during this tough time, it’s not unlikely that you are dreaming of online purchases to splurge your check on. Keep in mind, if you’re receiving a paper check in the mail, it may be possible for you to take a photo of it and send it to us through our Remote Mobile Deposit feature on our Members 1st of NJ app. However, this financial break may present the perfect opportunity to take care of more pressing expenses, or even start saving for the future. Like any income, the process of spending your stimulus check wisely starts with a plan. Here are a few ways to invest your $1200 by prioritizing your spending:
Take Care of Immediate Expenses
If the COVID-19 pandemic has caused you to suffer from a lack of job security, then using your stimulus check for immediate expenses should be a main priority. Layoffs, reduction in hours, and lack of business will influence your typical income, so it is important to budget your $1200 accordingly. Make a list of monthly payments that you routinely cover with your usual cash flow — including anything from groceries to utility bills. Depending on how much you have been set back due to a lack of job security, you can calculate the amount of cash necessary to take out of your check in order to stay on track. If the pandemic caused you to be unemployed, be sure to apply for extended unemployment compensation granted through the CARES Act.
Build Up a Cash Cushion in Your Savings
If you find yourself secure in your job amid the COVID-19 pandemic, then it may be a smart idea to grow your savings with the stimulus check. Different from an emergency fund, a “cash cushion” is a chunk of change kept in your savings to protect yourself from unexpected fees — such as overdraft penalties. The amount of money you contribute towards a savings cash cushion is totally up to you. Once you have padded your savings account with the appropriate funds, consider transferring the rest of your stimulus check to your emergency fund.
Save for the Future
It might be tempting to consider the trip to the Bahamas that you are itching to take as a viable option for a savings goal. While saving for that vacation is certainly a good way to dedicate your stimulus check to something special, there may be different goals that you should prioritize. A college fund, retirement savings, or Roth IRA account might not sound as glamorous as a week spent in the sun and sand, but the need for those piles of cash will creep up on you faster than you’d think. Consider splitting up your stimulus check and depositing it into necessary funds, or finally open the savings account that you told yourself you’d take care of once you’re more financially secure.
Spend Smartly
If your immediate and future expenses are both in order, then hooray! It’s time to treat yourself. But before you participate in an online shopping splurge, take a moment to reflect on how you can make an impact on your community during these tough times. With millions of employees left jobless, donating to small businesses in your neighborhood is a great way to put a portion of your stimulus check to good use. If you’re hoping to indulge in a product or service with your cash, don’t forget to support your local businesses while doing so. Host a family dinner with takeout from your favorite neighborhood restaurant and feel good about spicing up your Friday night. Your favorite small business will surely thank you!
At Members 1st of NJ, we’re here to support you during this tough financial crisis. Visit the contact page on our website and give our Vineland office a call to discuss your accounts with us or open up a membership today.