Wise Ways to Use Your Stimulus Check
With the pandemic persistence, the government is doing an excellent job of stimulating the economy. The third stimulus check is the biggest one so far, with each eligible individual receiving $1,400 to take them through the harsh economic times.
This is quite a good amount, and you can easily be tempted to splurge the check and get the latest designer shoes or that PS5 that you have always dreamed of.
While there is nothing wrong with giving yourself a once-in-a-while treat, the stimulus check is meant to help you lower your financial burden and multiply your money by making mindful decisions.
Best Ways to Maximize the Funds and Eliminate Financial Stress
Accumulate Your Emergency Funds
One of the wisest ways to better your finances is by bulking up your emergency funds if you have one. If you are yet to open an emergency account, this is the best time to do it, thanks to the financial relief coming your way.
You cannot predict what will happen tomorrow or a minute from now. The least you can do is stay prepared financially to feel secure amid ups and downs, especially during the crisis. Take a reasonable portion of the stimulus check funds, open an account with the assurance of having more peace of mind.
You can never go wrong with investing. The goal is to multiply your funds, and with an effective strategy, you will soon reap the profits.
The stock market is the most recommended investment option; rest assured of acquiring at least 8% returns on investment annually. The returns are not guaranteed, but you will have something to look forward to.
Nonetheless, ensure that you are familiar with the trading market before pouring your relief funds into it.
Boost Your Budget
The other fantastic way to spend your stimulus funds is to boost your malnourished budget. In the end, the primary aim of the stimulus funds is to offer relief to individuals with money shortages and allow them to live and pay bills comfortably.
Perhaps you were forced to cut on grocery shopping, you no longer include entertainment in your budget, or you have been struggling to settle energy bills.
You can now re-plan your budget and include all the essentials with peace of mind, knowing that you have a way to settle them.
Be sure to make use of budgeting tools to help you stay within your budget. You can enter the available amount before you start planning the budget, so you will not plan for more than you can afford.
Buy Health Insurance
Your health is critical, especially during these unpredictable times. You cannot afford to live without health coverage. Maybe you have never acquired health insurance due to money constraints. But now you have a way out. Take advantage of the stimulus funds to protect your health.
You do not necessarily have to spend all the cash on this. Take a specific percentage, select the most affordable policy and start paying the premiums right away. Your health is your future, and there is no better way to secure it than through comprehensive coverage.
Clear Some Debts
The American debt has reported a consecutive increase for the past years. In 2019, household debt was approximately 14.15 trillion, showing why you should prioritize settling debts. Credit cards, to be precise, feature a high interest rate, and you should therefore focus on settling this debt first.
From auto, home, credit cards, and student loans, debts can be an overwhelming albatross that impacts your physical and emotional health.
Things can get out of control real quick, especially when you do not have a stable source of income. Reducing debts is among the sure ways to secure your financial future. By paying loans and credit cards will help you minimize the amount spent on interest. The lesser the interest rates, the more the funds will have to save.
Nonetheless, before spending your stimulus funds to pay debts, check with the lender as others are offering debt relief, including waived interests and deferred payments.
You can either eliminate one or a few debts starting with the smallest or make little payments on all of your accounts.
Clear Your Taxes Arrears
The financial rescue plan is an opportunity for tax fillers to clear their arrears on time. Although the IRS was planning to delay the deadline by a month, it would be best to pay the taxes earlier than deal with the last-minute rush.
Many individuals have lost their jobs amid the pandemic. They are eligible for the unemployment benefits tax exemption and the child tax credit expansions. These provisions will help you save a lot, but the stimulus check will help you cater to the bills if you still have unpaid taxes.
Retirement Plan Contributions
Your 401(k) plan contributions are deducted from your paycheck. It will help you in the future if you make those retirement contributions now.
Your retirement contributions will determine your retirement funds. You, therefore, should not let financial shortcomings stop you from making annual contributions.
Open a Child Investment Account
Although part of the stimulus money goes to children, the best decision that any parent could make is to secure their children’s financial future. Perhaps you have paid the urgent debts and bills and still have some funds left. It would be best if you considered opening a 529 plan.
Besides ensuring that your kids are well off in their future, the child investment plan allows you to enjoy tax benefits. You should, however, seek the assistance of an expert financial planner for further guidance to help you open an account that suits your financial capabilities.
Times are hard, but the stimulus check makes life bearable for most Americans. It is up to you to spend your funds wisely to minimize debts and, if possible, multiply your money. You have a range of options on ways to spend your money. Choose the one that works best for you.
If you feel that you still need a financial boost on top of the stimulus funds, do not hesitate to reach out to Cash 2 U. We will offer a payday loan plus further financial tips at our several stores throughout Louisiana. Contact us for more information on the same.