If you expect to receive a stimulus check—or already have yours—put it to the best possible use: Here are seven.

By Lauren Phillips
April 17, 2020
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How to Use Stimulus Checks: Piggy bank with surgical mask
Credit: Getty Images

It was the worst of times, it was the weirdest of times—is there a better way to describe our new world of coronavirus and physical or social distancing? Life as we know it has shifted in bizarre and challenging ways in the last several weeks, and it’s still unclear when (or if) things will return to normal. As we all adjust to extended time home together and remote work, millions of people are adjusting to loss of income and financial difficulties, too.

Unemployment claims have skyrocketed to more than 20 million in the last four weeks, businesses have shut their doors for the immediate future, and many who still have their jobs are experiencing pay or hour cuts. It’s a difficult time, but a recent spark of hope for U.S. taxpayers are the coronavirus stimulus checks set in motion by the CARES Act.

Many stimulus checks have already been sent out through direct deposit—visit the IRS’s Get My Payment site to see where yours is or the TurboTax stimulus center to see how much you can expect to receive—and, while it won’t solve every financial woe, it is a bit of relief.  A payment of $1,200 per adult and $500 per child (with less money going to those with higher incomes) is a good chunk of money, though, and you likely want to use every penny of it responsibly. A survey from Bankrate found that 31 percent of U.S. adults who anticipate receiving a stimulus check don’t think the money is enough to sustain their financial well-being for one month, though, so take your check with realistic expectations.

Here, we’ve outlined seven smart uses for your stimulus check, no matter how large it is. Every situation is different, so spend, save, and invest wisely and consider talking things through with a money-smart friend, your partner, or your financial advisor. These stimulus checks aren’t a cure-all, but they will make your immediate financial situation a little easier.

1
Pay for the essentials

If you or your partner have lost your job or had a pay or hours cut, you likely need this money for your bills. According to an analysis from real estate company Redfin, the median monthly mortgage payment in the U.S. is $1,566, and the median monthly rent payment is $1,058. $1,200 ($2,400 for couples filing jointly) may not even cover mortgage or rent for some families.

Still, it’s important to focus on the essentials if you’ve experienced a loss of income and don’t have substantial savings. Put your stimulus payment toward rent, utilities, food, and other essentials—for now, it’s a one-time payment, so make it last as long as possible. The Bankrate survey found that 50 percent of those who expect to receive a check plan to use the money to help pay bills, while 41 percent plan to use it for day-to-day essentials such as food, medicine, and supplies. If you’re low on funds, doing so is certainly the responsible, necessary choice.

2
Add to your emergency fund

If your household income hasn’t been affected but you expect it might—or you don’t have an emergency fund—use your stimulus check to establish one. Experts predict the economy will get worse, not better, so plan for more financial upheaval and set aside money to see you through the rough patches. If you have a small emergency fund, add to it now: It’s still possible to learn how to save money during coronavirus for an emergency fund throughout this crisis.

3
Establish a money market fund or high-yield savings account

If your job security seems questionable but you already have a well-stocked emergency fund, consider putting your extra stimulus funds into a money market fund or no-penalty CD (certificate of deposit). If you lose your job, you’ll be able to access the money quickly as an extra emergency fund; if you don’t, it will grow during this time as a low-risk investment you can take advantage of later.

4
Pay down high-interest debt

Your emergency savings may be enough and your job may be stable, but you may also have high-interest debt. Using your stimulus check to pay down that debt in a large payment—or even pay it off completely—can reduce the amount you owe in interest over time and help your credit score. Think hard about whether that’s the best choice for you, though: If you use your relief money to pay off debt, there’s no getting it back, and you may be in need of those funds later. Take a good look at your savings to see if this is the best option for you.

5
Save for retirement or education

If you’re behind on saving for your retirement or saving for a child’s education, consider adding your stimulus check to either of those funds if your income is stable and emergency savings are solid. A little extra money can go a long way, thanks to compound interest, so consider spreading this check across your retirement or education accounts.

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6
Support local businesses

Even if your finances have been unaffected, local businesses in your community are certainly struggling. If you have substantial savings and no loss of income, use this money to support them: Donate to any funds they’ve set up to support their workers, purchase gift cards to use once they reopen, order take out or delivery, or see if they’re selling goods online. If you have a nanny, house cleaner, or regular babysitter, use your unneeded stimulus check to continue paying them as usual. Figuring out how to support small businesses during coronavirus may take a little creativity, but it will certainly pay off later.

7
Donate

Many, many people are struggling right now: Finding ways to give back during coronavirus is important, particularly if you don’t need your stimulus check money. If you donate to local organizations frequently, continue to do so; if not, consider local food banks or national food relief organizations such as Feeding America or World Central Kitchen. However you can give back right now, try to do so.