When it comes to your personal finances, no “one size fits all” plan will work. Rather, you need a plan that fits your personal circumstances. This is definitely true with the Economic Impact Payments, or the stimulus payments, that are being issued by the U.S. Treasury to help people impacted by COVID-19.
The stimulus payments are intended to help us with our finances during these tough economic times. But before going out and spending it, it’s best to create a financial roadmap to see where this extra money may work better for you.
First, assess your financial situation. Make a list of all your anticipated income, stimulus payment included, and all your expected expenses. Armed with this information, prioritize your spending and create a plan that will not only provide for the necessities but can also help reduce financial stress.
Following are some common situations that you or your family may be facing now. Follow these tips to keep you and your finances on track in the short term and to better prepare for the future.
If you don't have savings totaling three months of expenses:
- Use this money for basic necessities. Prioritize what needs to be paid first: food, rent/mortgage, and utilities.
- Contact your insurance companies, utility providers, financial institutions, and other debt carriers for ways to reduce or defer payments to reduce your monthly expenditures.
- Stay connected. The FCC pledged to keep you plugged in so companies like Verizon and Comcast are continuing service without payment for an extended time. https://www.fcc.gov/keep-americans-connected
- Save a little to create a cushion for the weeks and months ahead.
If you have a savings cushion
- Save your stimulus payment.
- Stop unnecessary spending and build your emergency fund.
- Practice mindfulness with your money - https://blog.safecu.org/practice-mindfulness-with-your-money
If you are in the fortunate position to be doing well economically
If you're fortunate to have a stable job and have saved so well that this economic downtown is unlikely to significantly affect your savings or livelihood, consider using the money to help the economy by supporting local businesses, charities, and individuals.
Help the economy
- Do you need a new car? You can find low interest rates on auto loans as well as possibly find good sales from auto dealers.
- Consider starting that home improvement project you have been putting off. Local trade workers need jobs.
- Support your favorite restaurant by ordering takeout or delivery.
- Sit back and drink a beer. Many local breweries are now delivering beer right to your door step.
Charities are suffering right now. Fundraising events are being canceled and some donors can no longer give. Be sure before you donate that you have determined the organization is legitimate. There are a lot of scams out there right now, so consider helping local charities you already know about.
- Consider donating more than you usually do to your favorite nonprofit or cause. Don't forget that Big Day of Giving is coming May 7.
- Find local nonprofits that are helping those directly affected by the impacts of COVID-19. You can find ways to help here.
- With a lot of fundraisers canceled this year, nonprofits are depending more on direct donations. If your favorite event has been canceled, consider donating the amount you'd normally spend to the nonprofit instead.
Give directly to those in need
- Considering giving a student, friend, or family member who may be struggling right now a gift card to grocery stores or other local businesses. You'll help a local company and someone in need at the same time.
- If you're a business owner and are in a position to grow, give your stimulus payment to help a struggling business such as one of your vendors or a customer.
Join a credit union and deposit the money there
Credit unions like SAFE are owned by our members, which provides the flexibility to address your needs more quickly and with you in mind. Because credit unions are nonprofit organizations, they can offer lower interest rates on loans and higher dividends on savings than banks do. We also make it our mission to work directly with members to provide them financial education that empowers them to take control of their finances and gain peace of mind.
Learn more about why you should consider joining SAFE.
Already a member of SAFE? Find ways we can help you cope with the financial impact of COVID-19.
Now is the time to improve your financial literacy and money mindfulness. SAFE Credit Union has a variety of financial wellness resources to help you improve your financial peace of mind.