Tens of millions of Americans are set to receive $1,400 in the form of a government funded economic stimulus check. For many, this will be the third payment they have received in the past 12 months. What you do with it is up to you. Some people will just be paying bills with their stimulus, and that is more than okay. The stimulus was not intended to be life-changing; it is meant to keep people afloat during a challenging time. If you listened to a certain financial coach you might think that a stimulus check is just throwing money at a problem, or “peeing on a forest fire.” To that we say, if enough people get together and urinate on a forest fire it will probably go out. Read on for a few smart ways to put your money to work, because only we can prevent forest fires.
Spend It On Stuff You Don’t Need
Sometimes you just got to do what makes you happy. If this Margarita Machine from Amazon doesn’t change your life we don’t know what will. And, you will have $150 left over! If you don’t like margaritas, may we suggest splurging on 2 of these $700 Dyson Vacuums? You can use one for about 15 minutes while the other one charges. So maybe these are extreme examples, but you can probably think of something that has been on your wish list for a while. The point is, if it makes you happy and you can afford it while still reaching your financial goals, go ahead and buy the thing.
Pay Down Your Debt, Or Pay Some Bills
It is no secret that Americans are smothered by debt. This stimulus might be an opportunity for you to pay off a credit card bill that has been hanging around for months, much like your friend that has been crashing on your couch while he looks to “expand his horizons.” If you can just pay off one credit card, we promise it will be life changing. If you just pay some regular bills that is okay, too. Do what’s right for you.
Do Absolutely Nothing
A wise man once said, "Never put off until tomorrow what you can do the day after tomorrow." So, if you can afford to, maybe just wait a few weeks before deciding what to do with your stimulus. Think about what you want to do. Think about what you would do if $140,000 landed in your lap instead of $1,400. Think about what you would do if a $1,400,000 check came in the mail. Depending on your answer, you might be able to do the same thing regardless of the total amount. If nothing else, put it in your savings account, and save it for the future (and read our post about building your emergency fund).
Invest For The Future
You already know that investing in the stock market is risky, but it can sometimes make you rich. Now, what if you had invested your first stimulus check the same day it was approved back on April 11th, 2020? Take a look at this chart for a popular S&P 500 Index Fund (SPY) and the growth it has experienced over the past year or so. If you had invested $1,000 into SPY on April 11th, it would be worth $1,420.15 today, March 18th, 2021. Not too shabby!
SPY chart courtesy of finance.yahoo.com © 2021 Verizon Media. In partnership with ChartIQ
Donate To A Local Charity
How about some instant positivity AND a tax break? Donating to a reputable charity does good, feels good, and is deductible on your taxes. We can almost guarantee that by continuously putting out positivity and generosity into the world you will see some of those riches come back your way. At the very least, you can deduct your charitable contribution on your 2021 taxes, and you can also make sure your Uncle Sam takes a little less out of your pocket next year. But what is most likely, by being a giver, and by being a positive influence in your community, you will see your life change for the better in many unexpected ways.
So, What Are YOU Going To Do?
This is not meant to be a comprehensive list of ways to spend your stimulus, nor is it meant to tell you what to do with your money. As mentioned at the beginning of the article, it is a blessing just to be able to pay off some debt, rent, or regular monthly bills with a tax-free stimulus check. What we challenge you to ask yourself is, ‘What is the best way for me to use these funds?’ and just do that! After all, why wouldn’t you use it in the best way possible to benefit yourself and to benefit the community around you?
We’d love to hear about your plans to use your stimulus, so come get involved on our Forum! Reach out using the comment box below or email info@coasttocoastfinance.com. You can also reach us on Facebook, Twitter, or Instagram.
This article is for educational purposes only and is not intended to be taken as investment advice. Coast to Coast Finance does not own positions in any of the stocks mentioned in this article, nor does Coast to Coast Finance intend to open positions in, or recommend opening positions in, these stocks or funds . All investments involve risk, and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit or protect against loss. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing.