Life Takes Money

Stimulus check round two: How will you make the most of yours? (Continued: Day 2)

Recap: Over the last few weeks Congress has been trying to hash out an agreement for a second round of stimulus money infused into the American economy. The first round of stimulus checks consisted of payments up to $1,200 per adult for taxpayers earning less than $99,000 a year and joint filers earning under $198,000 a year. There was an additional $500 added for each dependent child under the age of 17. Although it's not official, the second round of stimulus money will probably be similar, or maybe even a little bit more generous. So, if you're in a position to receive stimulus money, how is the best way to use it?

Yesterday, I covered the first two ways to plan for your stimulus payment and today I'll be sharing 3-5:

3. Do something good: What are you passionate about? If your job is stable and you have a fully funded emergency fund, then that's wonderful! Now, how could you put this money to good use in a way that betters the lives of others? This could be something as simple as supporting a local business by being a loyal customer. You can always donate some of the funds to charity to help someone that falls in the first category, just trying to survive. You could go even further, like I did with the first round of stimulus money, start a business that is focused on helping others not only get through this pandemic, but also how to be prepared for future crisis. I've been passionate about the socioeconomic dilemma in our culture for over 20 years and witnessed three massive market disruptions as an adult. I've been telling my friends and family for years that I wanted to help people get the knowledge they needed in order to change their financial outlook, but I used the excuses of not having the funds nor the time to get started. Coronavirus gave us all a lot of time at home during the shutdown, then the first round of stimulus money provided the funds to kickstart my business. I guess I ran out of excuses, and now with round two on its way, maybe you have too. Maybe now it's your turn to start doing something that you've always wanted to do but you needed that little bit of seed money and the time to get started. Turn this into an opportunity to do something good for others that will last well beyond the virus. Take a class that improves your market value and might lead to more financial support for your family. Start a side hustle teaching others what you have already mastered. Whatever it is that you've been putting off, just do it.

4. Treat yourself to something fun: okay, so you fall in that small group of people that have a stable job, a fully funded emergency fund, and you're already giving and working toward everything that you're passionate about. Congratulations, you are living the high life! If you're going to qualify for stimulus money, there is absolutely no shame in treating yourself to something nice, and you should treat yourself to something nice. It will put the funds right back into the economy and you are rewarded for having been a good steward leading up to now.

5. Do a combination of things: The stimulus package will not amount to a massive windfall of money for most, but there's enough to give to a charity, put some in savings, invest in yourself, and treat yourself to a little something nice. You don't have to use the money just one way. You can spread it around and do any combination of these things. The most important thing is to have a plan in place before it gets here so that you can be intentional about how you will use it. Without a plan, it's likely to wander off and you'll end up wondering where it went.

Stimulus check round two: How will you make the most of yours?

Over the last few weeks Congress has been trying to hash out an agreement for a second round of stimulus money infused into the American economy. The first round of stimulus checks consisted of payments up to $1,200 per adult for taxpayers earning less than $99,000 a year and joint filers earning under $198,000 a year. There was an additional $500 added for each dependent child under the age of 17. Although it's not official, the second round of stimulus money will probably be similar, or maybe even a little bit more generous. So, if you're in a position to receive stimulus money, how is the best way to use it? Over the next few days, I'll be sharing some tips for how to make the best use of this unexpected payment in your household. Today, I'll start with my first two:

1. Cover the essentials: the primary purpose of stimulus money is to help struggling families and keep the economy going, so the very first thing that you have to do is make sure that your essentials are covered. These essentials consist of food, shelter, basic transportation, and clothing. If you are out of work, or have a reduced work schedule because of the coronavirus epidemic, this money might mean survival for you and that's exactly the way you should treat it. This will likely be the last stimulus money sent, so you need to use this to survive and develop a plan for getting back to work. Your old job may never look the same, it could remain on hold for longer than you expect, or it may never come back. Whatever the case, you need to use this money to cover your basics and figure out a way to generate the income that you need in order to keep them covered.

2. Measure the stability of your situation: If the coronavirus continues to keep things shut down, is your job in jeopardy? If it is, do you have an emergency savings fund in place? I teach my clients to keep an emergency fund that is sufficient to cover their essential living expenses for 3 to 6 months. If you don't have the funds to put food on the table and a roof over your family for that period of time, then you should consider piling up cash just in case. This might seem impossible, especially if you're currently living from paycheck to paycheck, but I know you can do it if you make it a priority. Look at it this way, how much better would you sleep at night if you knew that you had enough money in savings to pay your bills for the next 6 months? Better yet, would you keep working the job that you hate if you had that kind of cushion? Putting the stimulus money into an emergency savings account might just change you whole life, which leads me to number 3 on my list, so be sure to check back here tomorrow! Until then, please feel free to share and let me know your thoughts in the comments below...