6 Things to do with your Stimulus Check (if you’ve already paid your bills)
Pay off (or Pay Down) High-Interest Debt
Interest rates are low for student loans, mortgages, and savings accounts, but if you’re carrying credit card debt, you’re probably paying upwards of 15%. You can free up a lot of cash by paying off those cards—and paying down debt gives you a rate of return you can’t find anywhere else. If you manage to pay off the entire balance, you’re also eliminating a monthly expense.
Support Local Businesses
Buy a gift card for a local restaurant or other small business that has been forced to close or scale back operations because of the coronavirus pandemic. That will provide the business with much-needed, and you can use the gift card to treat yourself to a nice meal or massage when the pandemic is behind us. It’s never too early to plan for Christmas or birthdays.
Make an extra mortgage or car payment
Paying additional principal on your mortgage can save you thousands of dollars in interest and help you build equity faster.
Look for savings with planned expenses
Check with your kids’ school, daycare, or extra-curricular activity (piano lessons, soccer, baseball, cheer, tumbling…) and pay for a semester upfront instead of month-to-month. Many times you’ll get a discount by paying in advance and that’s one less bill to worry about each month.
Donate your check to a person or organization that’s been affected by the pandemic
If you’re doing well financially, passing along your stimulus check to others could be a great way to spread the money around.
Splurge on items that you may not otherwise
Maybe it’s time to upgrade to a new car or get that four-wheeler you’ve been eyeing. Lake season is just around the corner – or maybe you want to make some big changes to the backyard with a “she shed”, a pole barn, or a fancy mower.
If you’re more interested in experiences than things, look at leasing an RV for a road trip vacation, or maybe the stimulus check could be your ticket to DisneyWorld.
Invest in a 529 College Savings Plan
Contributions to a 529 college savings plan grow tax-free, and withdrawals aren’t taxed if you use them for qualified expenses, such as college tuition and room and board. You can invest all or a portion of your stimulus check—529 plans typically have very low minimums. Plus, your state may give you a tax deduction or credit if you invest in your own state’s plan. If your children are young, you have many years for investments in the plan to compound and grow. To research plans, go to www.savingforcollege.com.
