Jon Paradise with Town & Country Federal Credit Union speaks to us about ‘Ways to Maximize/Use Your Stimulus Check’.
Take care of your immediate needs
Above all else, make sure your immediate needs are met. This includes food, monthly bills, and rent or mortgage. But before you prioritize rent over, say, food, consider that many jurisdictions, utility companies and even banks are offering relief due to the pandemic. See which programs you can take advantage of, then allocate funds accordingly
Save up to pay your taxes
It’s January 2021, and it’s unlikely the tax-day-deadline will be extended. This means taxes will be due in four months. If you don’t need to immediately use the $600, keeping it around to help pay your taxes would be ideal.
Pay down your debt
One way to secure your financial future is to reduce your debt. A significant payment made to pay down a credit card and loan will help reduce the amount of interest paid on an account carrying a balance. The less interest you have to pay, the more funds you’ll have available in the future. But before you do that, check with the debt holders, because some are offering relief, including deferred payments and waived interest. Just be sure to read the fine print, as some of the assistance offered could delay interest rather than forgive it.
Start or add to an existing emergency fund
It can’t be stressed enough how important it is to have an emergency fund. As this pandemic shows, the world can change very quickly. The fund should be equal to the amount of money spent on expenses for three to six months. The stimulus check can be used as a starting point. If you exhausted or spent some of your emergency funds, this second stimulus check can help get you back on track.
