Have you suddenly found yourself with a stimulus check? Are you wondering what to do with this new money aside from help pay the usual bills? Rather than spend the money on something frivolous, make a game plan and consider investing the money, using it to pay off debt, or putting it towards a larger purchase such as home improvement.
Pay Off Debt
Do you have accrued debt that you haven’t been able to keep up with? Using the stimulus check to pay off student loans or credit cards can be a smart use of the money. By lowering your debt now, you lower your overall interest rate and will save more money over time.
Or perhaps you have a mortgage on your primary residence or an investment property that you are slowly paying off. Using the stimulus check to make an additional payment can save money over time, as your interest on your mortgage rates will be reduced and you will reduce the money you owe to your lender.
Contribute to Savings or Retirement
Another good option for spending your stimulus check is to contribute it to a savings account through an online bank, where your stimulus check can accrue higher interest rates than it would just sitting in a checking account, maintaining face value. With your check in a savings account, the value of the check will increase over time, measurable through the annual percentage yield.
Some online banks offer savings accounts with special features such as high introductory rates for the first six months and savings accounts that offer a bonus interest rate each month. For a long-term savings account, put your check into an IRA that will contribute to your retirement savings. Multiple types of IRAs exist, from a Roth IRA to a traditional IRA which varies in cost and tax benefits. Whichever program you choose, you’re guaranteed to increase the face value of the check.
Invest the Money
Investing your money, whether it be into stocks or elsewhere, is a smart way to spend your stimulus check. Even though the stock market is down at the moment, that also means that stock prices that were once for sale at a higher rate are low, making it an advantageous time to invest in the market. Buy the stocks at a discount rate and even though it might take a long time, the market will recover eventually, and you will see a return on your investment.
If you are unsure of where to start, consult a financial advisor or professional investor to help guide your investment and compare investor rates. A safe way to place your money in the stock market is in mutual funds or low-cost index funds, which spread your money across dozens of stocks and reduce the risk of losing your investment in just one or two stocks.
Perform Home Improvement
Considering that most of us are spending the majority, if not all, of our time at home these days, why not invest your stimulus check into upgrading your house? Whether it be purchasing new home appliances such as a washing machine or refrigerator, or simply repairing already existing appliances, like a fridge leak, make your home as comfortable and convenient as possible.
By doing so, you will also be supporting small businesses and technicians, who need our support now more than ever. Consider investing in a local company such as Honolulu Appliance Repair, which offers refrigerator repair in Honolulu, among other repair services. Don’t hesitate to get in touch with their appliance repair experts, who can provide home service and fix your washers, dryers, or any other home appliances you may need.
Smart Spending for Your Future
Whether it be investing in stocks, making an extra payment on a credit card or loan, or investing in home improvement, there are countless ways to spend your stimulus check wisely. The bottom line: use it to invest in your future in whatever way fits best for you.