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What Should You Do With Your Coronavirus Stimulus Check?

What Should You Do With Your Coronavirus Stimulus Check?

April 17, 2020

Stimulus checks are coming!

About 175 million Americans will receive stimulus checks with the first payments going out over the next couple of weeks. Most will receive $1,200 plus an additional $500 per child. The payments are intended to help struggling Americans cope with job loss, reduced work hours, and other challenges as the country weathers the coronavirus pandemic. So what should you do with the money?

What are your pressing needs?

Kurt Pearson, founder of Compass Financial Services, suggests first focusing on your most pressing needs. “Shelter, food, and utilities are the top three,” he said. If you have been laid off or forced to take a cut in pay, consider whether you have enough money to cover those three things first, above all else. “If those three are covered, and it appears you have cash flow for the near future, then look at any other bills you may have to pay. Some lending institutions may have programs that would allow you to pay interest only for a period of time, or they may allow you to defer payments for a couple months,” Pearson said.

Once you’ve figured out all the details on your remaining bills, consider what to do with your stimulus check. Do you need that money to help cover some of those bills? If not, you may want to put it aside. “Remember, during a crisis, Cash is always King. Putting this money into savings and waiting may be a very good idea for your situation,” Pearson advised. LPL Financial Advisor Michele Bjorkgren agrees. She says beefing up your savings is a great idea anytime, but especially now, during this very uncertain time. “You want to have a goal to save 4-6 months of what it takes to run your household,” Bjorkgren said. Having that emergency fund in place definitely takes off some pressure and provides much needed reassurance.

What does your whole financial picture look like?

Pearson also suggests that since many of us have been given the gift of time right now, it’s a good idea to “sharpen the pencil” on your overall financial situation. Pearson said, “Fear can be paralyzing. A good dose of fear can be detrimental and devastating to managing our money. One of the best antidotes for fear is a little action, so sharpen that pencil and dig in!” Here is a list of things for you to consider:

  1.      Make a list of your assets and their value.
  2.      Take a good hard look at a current pay stub.
  3.      Look up the exact return of your 401k.
  4.      In detail, examine where you spend your income.
  5.      Make a list of your insurance policies.

Do you have concerns about your financial future?

These are trying times for all of us. If COVID-19 has triggered fear or concerns about your financial future, our team is here to help! Contact us or give call us today at (515) 327-1020 to get started with a free consultation with one of our Des Moines financial advisors - no strings attached.