How to Spend Your Stimulus Check

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The following is the transcript of the video above, “How to Spend Stimulus Check”. Therefore, it may be awkward to read. If you can, I would encourage you to watch the video. Automatically generated closed captioning is available on the video.


If you’re eligible for the stimulus money from the CARES Act related to COVID-19 or coronavirus, you may have already received the money or you’re probably going to be receiving it sometime soon.

Once that money hits your account, it’s going to be tempting to just give it to whoever is shouting the loudest at that moment. That could be your landlord, it could be a credit card company, or it could be a family member. And when stress is high like it is right now, it’s easy to just throw up your hands, just kind of give it to somebody, and hope for the best

But that’s not what you want to do. You certainly want to prioritize these funds and spend the stimulus money in the best way possible. Today, we’re going to go over a few ways to use stimulus money to make sure you’re prioritizing it to your best advantage.

How To Spend Stimulus Money

Buy Necessities

Your first goal should be to buy necessities, especially food and medicine. Things like your utilities, housing (rent or mortgage payment), your electric bill, your phone bill, etc., likely have some flexibility associated with them right now. Many of those companies may be offering no late payment fees or some sort of deferred payment or lower payment, to get through this situation.

But food and medicine are going to be difficult to have a lot of flexibility with. Those are necessities that you need to take care of right now, so make sure you do that.

If there’s leftover money after buying food and medicine, you certainly want to still keep some money aside for those utilities and rent. Hold on to that money but kind of assign them in your account and say, “This isn’t for just random things that I want to purchase, this is for the future when I’m going to have to catch up on my utilities and rent.” But you have it set aside so that if you do need that money again for food and medicine in the near future, you’ve got it available.

Don’t Pay Extra on Debt (Yet)

It may be tempting to pay down debt right now, but I really recommend not doing that, especially if your income is in flux.

You might be thinking, “I’ll just use the money to pay it on my credit card and I’ll have this available credit then to use if I have an emergency or if I need to go out and buy more essentials like food and medicine.” But the problem with that is you’re taking the money out of your control and putting it in the control of somebody else. That credit card company can easily just lower your credit limit right after you pay on it.

I’ve had some clients experience that in the past. They had a large sum of money come in and they said something like, “I’m going to take this $5,000 and pay it on my credit card, and then I’ll have $5,000 available credit if I need it.” But unfortunately, that person in that example took that $5,000 payment on a credit card and then found out that that credit card company lowered their credit limit by $5,000. Then, they didn’t have it as available credit anymore. It was like they completely wasted that money. They didn’t have money for those things that they absolutely needed at that point.

So you may think that it’s good to pay down the debt, but it’s not really at this time. You can certainly hold on to the money you WOULD have paid on the debt, and if we get through this crisis and you still got those funds available you can certainly make those extra payments. But for right now, hold on to it to keep it in your control so you can use it for the things that you need to if you absolutely have to have that money for something else.

If the debt is really stressing you out, you should certainly call up your creditors to see what kind of things they’re offering right now because of this pandemic. Many of them are offering lots of flexibility. That could be skipping a payment with no late charges (some of them are still charging interest on the balance and some of them are not), some of them are giving lower interest rates for a little bit of time, you might even be able to get on a lower payment plan. Just call up your creditors and see what kind of flexibility they have.

You certainly don’t want to just ignore them and hope for the best. Don’t think that they’re going to take care of you. You have to ask for a lot of this stuff. So make sure you call your creditors and let them know the situation that you’re in to see if they can offer you assistance to get through this current situation.

Build Up Your Emergency Fund

Another goal should be to build up your emergency fund. And if this pandemic does anything for your finances, it’s really going to hammer home the importance of an emergency fund. The biggest risk for most Americans is a potential job loss and a lot of people (maybe you included) have lost a job and have a much lower income at the moment. Having an emergency fund can get you through these situations if they were to occur at some point again in the future.

So set aside some money for emergencies in the future because that’s keeping that money in your control so that you have the ability to use it for what you need it for. If you’re not sure how much you should have in your emergency fund, here’s a video on how much you need to have in your emergency fund.

Relieve Some Stress

If you’re in a good financial position right now, maybe you’ve got a pretty decent emergency fund, you have a job right now where you’re still employed full-time, your income hasn’t been cut it looks like that’s going to continue throughout this pandemic, you can certainly use some of the funds to make life at home a little bit more comfortable right now. That’s especially true if you are sheltering in place in your home.

Maybe you use some of the funds to buy some patio furniture for outside like my wife and I did. We don’t have many places that we can go during this current pandemic, we’re not doing all kinds of crazy things, but we do want to get out of the house a little bit so we bought some patio furniture to sit outside to make things a little bit more comfortable for ourselves. That’s going to help relieve some of the stress that comes with this current situation. So maybe you could use some of those funds to make life at home a little bit easier, especially if you’re going to be at home a lot during this indefinite time.

Help Others In Need

If you got everything that you need and you feel comfortable at home and you still got the funds, certainly consider using some of the money to help somebody out.

Maybe you help out a family member who isn’t in as good of a financial position as you, maybe a neighbor or other people in your community. Consider taking some of the funds and donating it to a charity. Look for a local food bank in your area. Many of them are not accepting actual food donations, but they are accepting cash donations so then that agency can then go out and buy their own food to provide to the community.

Some Final Thoughts

As a final thought here, in these uncertain times I really want you to focus on the things financially that you can control. This stimulus money that you received, that is something that is in your control. Focus on how you can use that money to best get yourself in a better financial position.

Try not to get stuck on the things that you cannot control like additional stimulus bills. A lot of people are putting videos (and news articles) out there about the possibility of an additional stimulus bill at some point in the future. The problem with that is you are focusing on something that is out of your control as most of that has not been finalized at this time.

Try not to get your hopes up for something that may eventually not happen. Remember to take your time and energy and focus on the things that you can control.

I just want to say stay safe out there. If you do venture out of the house, do it in a safe way. Keep others safe and keep others in your mind. That’s the important thing to do during this pandemic.

If you’ve got extra time at home, now is a perfect time to get your finances in order. If you’ve been neglecting them and said, “I don’t have a lot of time to focus on them”, now is a great opportunity to dive deeper into your finances. Here’s a playlist of some of the videos I recommend you watch if you’re new to my channel.

So again, stay safe and we’ll certainly get through this. And when we do, hopefully you can come out ahead of it in a much better position financially.

Now get out there and take care of your money, so it can take care of you later.

Your financial coach,