For my readers in the US, and other countries offering stimulus checks. By now you’ve probably calculated what your stimulus check from the CARES act will add up to. You may have even planned what you’re going to do with it, if you don’t need it to pay bills right away. $1200 per adult, $500 per child, that’s a lot of money. It’s easy to look at the gift horse and see it turning into 75″ TV, or a backyard hot tub, or a down payment on a new car. If you’re on working on paying off debt, that’s a nice chunk to throw at it! If you’re on the FI path, that’s a great start toward your IRA contributions this year.
I implore you, don’t do any of those things yet if it’s not paying for the roof over your head, or the food on your table. Stash the money somewhere as an extra rainy day fund if you don’t need it right away, and some people do need it right this second or they’ll get so far behind they’ll lose their home when Covid sheltering ends. But the sad reality is, that could be any of us, at any moment right now. Who’d have thought in January that the entire restaurant industry in the United States would suddenly close up shop? Who saw every bar closing? Stop lying, you did not! You’d have needed an ancient Greek oracle to see this lockdown coming. Right now no one knows exactly what that’s going to mean for other industries over the next couple of months.
My advice? Treat this money as though you know in advance that you’re losing your job, and have time to plan. Plan your best path forward if you suddenly lost your income. Normally that’s going to be keeping this in “cash.” In a savings account that you can easily access in case of an emergency. There’s no harm in looking for the best interest rate you can find on a savings account quickly. Some online accounts like Ally come to mind. But do NOT make the mistake of blowing this, paying off debt with this, or investing this until we’re through this Coronavirus craziness. You do NOT want to need this money, and it no longer be there. You’ll have plenty of time over the next few weeks to months to plan what you’re going to do with it after we are safely able to lift restrictions, and no longer seeing case spikes.
Now with all of that said, what are your plans with your stimulus checks if you make it through this without needing it? We will be applying most of it to debt, as long as we make it through with both incomes still in tact. And, with 5 kids, it will make a big dent! I wish all of you health and good fortune as we traverse this pandemic together.