Congress recently passed the third COVID-19 relief package, and many people are paying attention. As part of the package, stimulus checks of up to $1,400 will be delivered to eligible Americans -- both at home and overseas. If you could use some ideas for how to spend it, consider these 7 options.
1. Cover the Basics
Even with stable employment, you can never go wrong with spending your stimulus check to help cover the costs of daily living expenses and monthly payments.
Spending your stimulus check on things like your mortgage or rent, utility payments, and food can help open up your budget in other areas. Especially if you feel like you’ve been just barely making ends meet, or you look at your spending at the end of the month and think: Where did it all go?
It may not be the most “fun” way to use your stimulus check, but spending money wisely is always a good idea.
2. Work to Pay Off Debts
If you’re like most Americans, you may be carrying debt: the average American has more than $30,000 in personal debt, mortgages excluded. Whether it’s student loan debt, credit card debt, or something else. Unfortunately, debt and the associated high interest rates often lead to more financial stress, which can easily feel out of control.
Your stimulus check can help you get started on debt repayment. Two popular strategies are the snowball method and the avalanche method. Here’s the difference between the two: With the snowball method, you pay off smaller debts first, which helps you build motivation. The avalanche method, on the other hand, is used when you pay off debts with the highest interest rates first.
3. Save for the Future
Thinking about “normal,” post-pandemic life is still a bit difficult to imagine. But as vaccinations help decrease COVID cases, there seem to be brighter days ahead. For many, it’s enough to begin dreaming and planning for the future again.
Whether you’re active duty and looking forward to using your leave for a much-anticipated vacation, or a parent who is thinking about their childrens’ futures, or a couple who wants to make sure they’re comfortable and happy throughout their future retirement. We all have something to save for.
If you’re planning a trip, set some of your money aside in a savings account so you’ve got some extra spending money in your destination. If you’re a parent, look into opening a 529 college savings account for your childrens’ education. If you’re thinking about saving for your future, contribute to your Thrift Savings Plan retirement fund. Especially when it comes to college savings or retirement accounts, the more you save today, the more your money will work for you in the future.
4. Boost Your Emergency Fund
Another great way to save for the future is by making sure you’re covered financially in the case of an emergency. An emergency fund -- or a “peace of mind” account -- can help provide a cushion during life’s more expected moments. This money can help with anything, from a PCS, to an unexpected home or car repair, to a medical bill.
An emergency fund can make sure your emergency doesn’t cause any additional stress for you from a financial standpoint. And even starting small with your savings can make an impact.
Whether you already have a peace of mind account, or you’re just starting one, using all or part of your stimulus check for your emergency fund can help prevent your family from falling on hard times.
5. Support a Small Business
At the beginning of the pandemic, many of us went out of the way to support small businesses through a difficult time. A year later, it may not be as high on our priority lists -- especially as we all experienced changes of our own.
But small businesses still need our help to come out on the other side of the pandemic, especially now as we get closer to the end. If your stimulus check gives you a bit of disposable income, supporting a small business could be a great way to invest in your local community. As a bonus, you’ll get a delicious meal or a unique, handmade item at the same time.
6. Send a Care Package
If you want to spend your stimulus check in a way that helps someone else, what could be better than sending a care package? Military families especially understand the importance of care packages. Whether you’re sending a care package to a loved one who is serving overseas, or to a friend or family member who lives alone and could use a little bit of sunshine in their day.
Consider purchasing your care package supplies from a local business -- not only are you supporting your community, but you’re sharing a taste of home with your care package recipient.
7. Spend it on You
This year has been unlike anything most of us have experienced before. Many of our plans were altered, and some of the things we enjoyed most in life were taken away from us.
And if you want to spend your stimulus check on something that’s going to make you happy, there’s no shame in that at all. Whatever can make life a little more enjoyable is worth it.
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When you’re in the military, your needs are different, and your banking should be too. That’s why, no matter where you’re stationed in the world, Armed Forces Bank strives to make everything from banking solutions to financial advice personal, valuable, and convenient for you.