Here’s What You Should Actually Spend Your Stimulus Check On
By LITERALLY BROKE
If you’re bored in the house and you’re in the house bored you probably have a growing list of all the things you could buy with your stimulus check.
From a new coffee table to a food processor, the temptation to waste what feels like ~free~ money on home improvements and other random shit is real.
But before you step on the gas and head to Reno, identify the financial move that actually makes sense for you from this list of options:
Take Care Of Your Living Expenses
Before you make any decisions about where your stimulus check should go you need to prioritize your four walls. The “four walls” describe your budget priorities each month. They are:
Food
Shelter
Utilities
Transportation
If you’re having trouble meeting these needs because of loss of income, you are not alone. That said, right now these recurring expenses should be your #1 priority because they impact your basic survival.
Funnel your stimulus check to meet these needs first but def look into hardship programs your providers are offering before making any payments.
For example, if you live in an area that’s halted evictions, there may be good reason for you to put all this money towards your food needs instead of putting it towards rent.
Check out these posts for more resources and tips:
Save An Emergency Fund
An emergency fund is a critical buffer protecting you from loss of income, unexpected bills (ie medical bills), and other unforeseeable financial hardship.
Things an emergency fund is not? A credit card. A place to dip into when you want to order new housewares from Urban Outfitters. A bank account for when you’re feeling “stressed.”
If you either currently have an income or don’t need your stimulus for basic living expenses but are without at LEAST a 3-month emergency fund, you need an emergency fund STAT!
How do you do that? It’s two steps: 1) create a high-interest online savings account (check out my favorite, Ally) and 2) park your stimulus there for the foreseeable future.
But I have a credit card.
But I have debt.
Stop! None of that is critical right now.
An emergency fund is what separates you from financial ruin. If that sounds dire it’s because it is. Create an emergency fund and make it a priority for the rest of your life.
You’ll thank me later.
Pay Off High Interest Debt
If you have any lingering high-interest debt (above 5%) now could be a great time to chip away at it.
That said, you should only opt for an extra debt payment if you meet the following criteria:
Your basic living expenses are covered for the foreseeable future
You have a healthy emergency fund (at least three months of core living expenses).
The interest rate on your debt is above 5% (think private student loans and credit cards).
Unless you’re feeling really gung-ho about aggressively paying off debt (in which case, go you) your stimulus check is best reserved for debt with a shitty interest rate that wasn't positively impacted by the CARES act.
Paying off debt is probably the least fun of all these options, but in the long run you’ll be very glad you did it.
Invest in Yourself
Have you been dreaming about self-producing a short film or taking an improv class you’ve heard a ton about? Now is the time to think of ways to invest in yourself.
Create a Qapital account (it’s my favorite short-term savings app) and start saving for it! Just the act of creating a savings account earmarked for a creative endeavor can be really exciting, and now you have an extra $1,200 to put towards it!
Unlike investing in the stock market, investing in yourself gives you a guaranteed ROI. Take an online class to brush up on a new skill so that when the economy does start back up you’re either a) a more marketable candidate or b) a better artist.
And if you do decide to fund a project, download my FREE savings tracker here.
Give Back
Giving back is essential right now. Whether you want to support essential workers or local non-profits helping those in need, consider donating part (or all) of your stimulus check. You can find some worthwhile inspo here.
While $1,200 can either seem like a little or a lot depending on where you fall on the economic spectrum, it’s important that you weigh your options carefully and stretch this money as far as it can go. You gotta’ make it count.