How should I use my stimulus check?

How should I use my stimulus check?

Amie here, resident CFP® and Financial Coach at Trim.

Many of you should be expecting a stimulus check soon. Most Americans are receiving up to $1,200 per adult (and $500 per child) which is helpful in a time like this! If you’re not sure how much you will receive, you can get an estimate from this calculator. Here is a tool from the IRS that can also keep you up to date on the status of your check.

I have been asked by many of my clients how they should best use this money. Here is what I recommend:

Has your income recently reduced?

If so, I encourage you to use this money for the basic necessities like food to get you through until you can increase your income again. This will prevent you from having to use your credit cards and go deeper into debt. If you are struggling to make ends meet, I highly encourage you to call the companies you pay your bills to and see if they can defer your payments. Many banks, utility companies, and other billers have created COVID-19 assistance programs to do just that. When discussing payment deferrals, make sure you understand how this will impact any future payments. 

**Our Bank Negotiation team is helping Trim members call into their banks and lenders to push out due dates.

Do you have an emergency fund?

If not, and if you don’t need this money for the basic necessities, then I recommend that you set this money aside. This is an uncertain time in our economy and now is the time to start building up your savings. This will prevent you from going into debt if you do start to lose your income. 

**We offer a Simple Savings account with weekly and automated transfers. All funds are FDIC insured up to $250,000.

Do you have credit card debt?

If you already have one-month’s worth of expenses in savings, then it might make sense to use this money to pay down credit card debt. I recommend that you focus on your highest interest-rate debt since this is the fastest way to get out of debt. 

Hopefully this helps to guide you in the right direction with your upcoming stimulus check.

-Amie Alvarado, CFP®

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