Economic Stimulus Check: Don’t blow it!

Right the economy is in a mess. Well it is in a better mess today than it was a couple of weeks ago, but when the stock marketing was dropping it like it was hot, the government was pulling out all stops. That included passing a $2 trillion stimulus package where every American that makes under $99,000 would receive and economic stimulus check for up to $1200 per adult and $500 per child. Those checks should start to hit direct deposit accounts on what is historical tax day, April 15th. How ironic is that? Instead of pay the government, they are paying us. I digress.

So with the mix of tax refunds and this stimulus check, there is an influx of extra cash into households that typically don’t have this type of monthly income. The normal and natural response will be this: I have been stuck in this house for x amount of weeks. I deserve (insert that thing that you know you don’t need but want and will keep you busy for all of 5 minutes.) And as you know, I am not here to teach you to be normal. So let’s talk about what you should do with that check.

You have been laid off or furloughed

Okay, this will be a little obvious for you. Your money is unsure right now and the economic stimulus check will help you put solid ground in your budget. If you have an emergency fund that you have been tapping into in order keep your household going, put this check into that account to keep you afloat until you are either called back to work or find a new job. Once you income is sure again, keep it in your emergency fund just in case.

You still have steady income and debt

Your job has just relocated from a fancy office building into your dining room. Your paycheck is still coming in and you don’t foresee that changing. It is very tempting to use the government’s money to buy something fun fro yourself or just shop because you are bored. Stop for a moment and remember that is how you accrued the credit cards that hit you hard for interest every month. Pull out your debt worksheet and see how many of those companies you can knock off your list with this “free” money. To make the money from the economic stimulus check go even further, call the companies you owe and see if you can negotiate a smaller settlement. Be productive with everything you have, time and money.

You still have steady income and no debt

This still isn’t a pass for you to go and blow this check. If you are receiving this check, that means your income is not at a level where you can really afford to just go around and blow money arbitrarily. Is your emergency fund fully funded to cover 3-6 months of expenses? Are your kids college funds funded? Is your mortgage paid off? If you said no to any of those questions, then you shouldn’t be spending a dime. Apply that money to your emergency fund or to knock off a portion of the principal on your mortgage.

While the stock market is back up today, the unemployment numbers are growing tremendously and we have no idea when this turmoil will end. Take advantage of your current situation and be smart with your money. While heading into a time of famine is not the time to pretend like you are living in a time of feast.