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Best Uses of Stimulus Checks for Main Street Americans

With stimulus checks starting to show up in Americans' bank accounts, what’s the best use of the cash? First things first, experts say.

Stimulus checks are beginning to pop up in Americans' mailboxes and bank accounts, and none too soon.

Approximately 80 million people were supposed to receive stimulus checks by April 20, many of which appeared in their bank accounts through direct deposit and others who got prepaid debit cards in the mail, said Andrea Woroch, a financial author and expert based in Bakersfield, Calif.

“If you're expecting a payment, but didn't get it yet, don't sweat it,” Woroch said. “Millions more will be issued in the next week. You can check the status on your stimulus payment at [the IRS site].”

The checks, up to $1,200 per individual and up to $2,400 or more for U.S. families whose spouses file taxes jointly, are sorely needed in a pandemic era where money is hard to come by.

According to data from the First National Bank of Omaha, 59% of U.S. adults note they’ve “experienced a loss of income as a result of the coronavirus.”

Additionally, 45% say they are “having trouble paying bills” and 52% report “not having enough savings to cover three months with no income.”

That’s where the stimulus checks come into play. While they won’t cover a struggling family’s financial burden during the coronavirus crisis, the money can help – especially if it’s used judiciously.

“Unemployment is at an all-time high and may continue to climb, bringing with it financial struggles that many Americans have not faced before,” said Sean Baker, an executive vice president at First National Bank of Omaha.

      • How to File for Unemployment During the Coronavirus Pandemic

Americans in serious financial trouble should use stimulus check funds for groceries and medicine and on paying essential bills, Baker said. “At the same time, if your budget allows, we encourage all individuals to help stimulate the economy by shopping local, wherever you can,” he said.

Some Americans have their own ideas of how to spend their stimulus checks.

According to the First National Bank of Omaha study, of Americans who expect to receive a stimulus check . . .

  • 38% plan on paying off necessary expenses.
  • 21% plan on putting it into savings.
  • 15% plan on paying off debt and 3% plan on investing the funds.

Some Americans are using their cash for other “non-essential” purposes, depending on one’s point of view.

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Best Uses for Your Stimulus Check

While everyone has an opinion – and then some – on the use of their stimulus checks, money management professionals have a more direct approach to spending stimulus cash, with these spending targets at the top of their advisory list.

(Note: all of the following tips depend on the income a household already holds. If you have any specific questions or issues on the best use of your stimulus check, contact a local financial adviser (these days, many are offering advice  free.) Or, reach out to solid non-profit advisory groups like the Foundation for Financial Planning or the National Foundation for Credit Counseling.)

Save the cash. “If consumers have income currently but feel uncertain about their future earnings, they should save the stimulus funds and prioritize savings in their budget going forward, especially if they don’t already have healthy reserves in place,” said Jim Triggs, chief executive officer at Money Management International in Phoenix, Ariz. “For most households, the stimulus check will represent less than one month of basic expenses, but it can be a nice jumpstart to their emergency savings fund—something we know many Americans struggle to maintain.”

Do a household “financial need” inventory. Triggs is also a big advocate of planning before spending – especially when it comes to a “one-shot-only” government stimulus check.

“If a household doesn’t have regular income right now, they should explore every available resource before using these funds,” he said. “If you have to spend the funds on necessities like food and basic living expense you should do that. But first step back and evaluate before making a decision. There could be local resources available to help with even basic necessities.”

Pick and choose household financial priorities. Triggs also supports taking aim at immediate household needs but he issues a wise caveat – stay in touch with your creditors if you’re having repayment problems.

“The key is to preserve and stretch your funds for essential needs,” he said. “If you cannot pay your creditors, contact every creditor on every bill you pay each month (or check their website since phone lines may be overloaded) to request hardship assistance.”

Most creditors are offering hardship programs to help you during this crisis, Triggs added. “Also don’t forget to cancel or suspend non-essential services that may be set up on autopay from your credit card or bank account,” he said.

Prioritize bill payments. Although many lenders and monthly service providers are allowing customers to defer payments, some may continue charging interest and that means you could owe more down the road so you have to do some research.

“For instance, the Federal Student Loan freeze means you can defer payments without interest piling up. Private student loans, on the other hand, will continue to accrue interest during a deferment and that unpaid interest may be added to your final balance,” Woroch said. “Therefore, if possible, use your stimulus check to continue making these payments so you don't end up owing more in the end.”

Pay down your credit card. If you feel good about how much you have in savings, paying down your credit card debt will instantly give you a financial boost because you will spend less on interest every month and that money could be used for other expenses, Woroch noted.

“Take it a step further by applying for a credit card that offers 0% interest on balance transfers (anywhere from 12 to 21 months),” she said. “This will buy you more time to pay down the balance, interest-free. You can even use a small portion of your stimulus check to boost your credit score.”

Create an online will. A recent survey found that more than 60% of U.S. adults do not have an estate plan, Woroch said. “Many people put it off because the process can seem confusing, daunting and expensive, but if there’s anything the coronavirus outbreak has taught us, it's that life is full of unpredictable moments,” she said. “Creating your estate plan will give you peace of mind that you, your family and your assets are protected.”

Woroch advises creating a will online right from home using online sites like “They offer step-by-step instructions and live chat support to help you through the process. You can create an online will for just $70 in 10 minutes,” she said. “This is a small portion of your stimulus check that give you financial security and it's even something you can do for your parents if they don’t have one.”

Refinance your mortgage. With low interest rates forged from the fire of the pandemic, refinancing your mortgage is an opportunity to lower your monthly payment while saving potentially thousands of dollars over the life of your loan.

“Your stimulus check could cover some of the fees for refinancing,” Woroch said. “Just make sure to comparison shop for lenders just like you would a big-screen TV to ensure you find the lowest rate and best loan terms.”

Short but Potentially Sweet

The downside with the pandemic payments is that the money likely won’t last that long. After all, $1,200 only goes so far.

In fact, 31% of U.S. adults who anticipate receiving a stimulus check as part of the CARES Act believe that the money would not be enough to sustain their financial well-being for one month, according to a recent survey.

Consequently, with immediacy in mind, getting the most out of your stimulus payment relies on good planning, solid decision making, and an eye on taking care of your most pressing financial needs first.

That should take some pressure off and provide some much-needed breathing room – for the short-term, at least – until cash-strapped Americans can get back on their feet financially.