What Should I Consider Doing With the Money?
May 1, 2020
The stimulus checks from the Coronavirus Aid, Relief and Economic Security (CARES) Act are beginning to land in checking accounts and mailboxes around the country. The $1,200 granted to most middle class adults is a welcome relief during these financially trying times.
How to Use Your Stimulus Money
To help you determine the most financially responsible course of action to take with your stimulus check, Justice Federal Credit Union has compiled a list of options on how to use this money.
First, make sure you can afford to cover your necessities. With millions of Americans out of work and lots of them still waiting for their unemployment insurance to kick in, many people are struggling to put food on their tables. Most financial experts agree that it is best not to make any long-term plans for stimulus money until you can comfortably cover everyday expenses.
You may need to create a new budget, one that fits the times. With unique spending priorities in place, an absent or diminished income and many expenses, like subscriptions and entertainment costs, not being relevant any longer, it can be helpful to reconfigure an existing budget to better suit present needs. As always, necessities, such as food and critical bills, should be prioritized.
Build Up Your Emergency Fund
If you’ve already got your basic needs covered, look at long-term goals. Emergency funds should ideally be robust enough to cover 3-6 months’ worth of living expenses. If you already have an emergency fund, it may have been depleted during the pandemic and need some replenishing.
If you do not yet have an emergency fund, or your fund is not large enough to cover several months without a steady income, you may want to use some of the stimulus money to build a fund to fall back on during lean times.
Pay Down High-Interest Debt
According to the Federal Reserve Bank, Americans owed a collective $930 billion in credit card debt during the fourth quarter of 2019. Using some of your stimulus check to pay off high-interest debt may be a great way to get a guaranteed return on the money. To provide extra help for everyday needs, Justice Federal is offering existing VISA Credit Card holders a special annual percentage rate of 4.99% on all Purchases, Balance Transfers and Cash Advances thru February 2021 on transactions made May 1 – July 31, 2020. The annual percentage rate will revert to 11.90% - 18.00% based on your VISA credit card’s terms and conditions.
Boost Your Savings
If your emergency fund has you covered and you have made headway on your debt, it may be a good idea to use some of the stimulus money to add to your Justice Federal Credit Union savings account. The money in your savings can be used to cover long-term financial goals, such as a down payment on a new home, or funding for your retirement.
Consider all your options before choosing how to spend your stimulus money. If you need further assistance, feel free to reach out to us at 800.550.5328, Monday – Friday, 8:30 AM – 8:00 PM, EDT.
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