4 Tips for Using Your Stimulus Check
The coronavirus (COVID-19) pandemic has had a financial impact on millions of Americans. Lawmakers recently passed a stimulus package to combat the economic impact of COVID-19. With the Coronavirus Aid, Relief, and Economic Security Act (CARES), bill, people can receive a stimulus check of up to $1,200 for each adult and $500 for every child.
Stacey Black, Lead Financial Educator at BECU, has some general suggestions on four areas to prioritize if you can, when it comes to your stimulus check:
Start with the Essentials:
Prioritize your essentials first: things like medication, food, utilities, and housing. Taking care of your immediate needs.
Once you've taken care of yourself and your family's immediate needs, you can look at other areas to allocate the money.
Look at housing costs like rent or your mortgage. "While many states and lenders are taking steps to provide support for homeowners and renters, including suspending evictions and foreclosures, and deferring payments, if you can afford to make these payments, you should," Black said. "They will eventually come due, and staying current will be much less stressful than falling behind."
Black recommends reaching out to our partners at GreenPath Financial Wellness to speak with a financial counselor to help you best navigate this situation.
"We've partnered with GreenPath Financial Wellness to provide members access to free one-on-one financial counseling," Black said. "BECU members can turn to GreenPath's certified experts for help with managing through a variety of financial challenges."
Auto Loans & Lease Payments
Black recommends trying to keep up on your auto loan or lease if you can, and if you have fallen behind, consider using the stimulus money to catch up on late payments.
"Many auto lenders are offering payment or debt relief options, such as deferred payments or waived late fees, to help people through the next several months," Black said. "Most don't want to see you default on your loan or face repossession, so be sure to stay in contact with them and keep them up to date about your situation."
Credit Cards and Unsecured Loans
Lastly, Black recommends putting money towards your unsecured debt payments like credit cards.
"Lenders and the government are working to provide support for these debts as well," Black said. Check your lenders' websites to see what concessions may be available to you if you cannot afford your minimum payments. Keep in mind that interest will likely continue to add up on these debts."
If you've made your minimum payments, set aside money for an emergency fund, and have handled your housing and auto loans, Black suggests putting some of the money towards paying down the principal on your unsecured debts. "The more you pay off now, the more you will save in overall interest," Black said.