Spending Your 600 Dollars
Unfortunately, it looks like this round of stimulus will be a little less than the last. The expected amount is 600 dollars per person or half of what the last round paid out.
Still, 600 dollars is a nice amount of money and you can use it to improve your financial situation.
If you are currently in need, you will probably need the money to catch up on bills, but what about the rest of the country that is “making it” at the moment. Should you treat yourself?
The answer is probably no, because this Pandemic is far from over. You may not be impacted now, but tomorrow may be another story. Let’s take a look at some places where you can put that money.
Pay Off Credit Card Debt
If you are like most Americans, you are carrying credit card debt. This is probably the best place to put your money. Take 600 dollars and pay off a credit card and that is money that you will no longer be paying interest on. That is over 100 dollars saved in a year if you have an average interest rate.
Besides savings in interest, there is another advantage to paying down credit card debt. The money will be there if you need it in the future. You are paying off debt which increases your available credit. Should a need arise in the future, you will have the credit to handle it.
Last, but not least, paying off credit card debt will likely result in a credit rating increase. That might encourage your creditors to increase your limits and could result in a reduction on expenses like car insurance.
Put It Into Savings
If you have credit card debt, you should put your money there first, but what if you are debt free?
If so, put that money into a savings account. If you have a savings already, great, 600 dollars will add nicely to it. If not, it is time to get one.
For best results, we recommend opening an online savings account. You want one that is not attached to your regular checking account for several reasons.
The chief reason for opening a separate account is that it makes it just a little harder to get your money. No instant transfers and that means no impulse buys. With most online accounts, it takes one business day to get your money. That is fine for an emergency but long enough to keep you from making a bad decision.
Another reason to go online is that the interest rate paid is usually much higher. It might be the difference between earning 1 percent or .1 percent. Not a huge amount of money, but why leave anything on the table.
Invest In Yourself
If you were to lose your job during the Pandemic, what would you do?
Obviously, you would look for a new one but there will be a lot more candidates out there than usual. That means that you would need to separate yourself from the pack and stand out in the eyes of a new employer.
Why not take your money and invest it in yourself. Take a certification course, learn a new language, etc. There are a lot of good online learning options these days and you can invest your money in one, learn a new skill and still stay safe at home.
By investing in yourself, if the worst were to happen, you would be more prepared to move on. And, who knows, investing in yourself might make you more valuable to your current employer. That could mean a pay raise or at least more stability at work.
Start An Investment Account
Sure, it is just 600 dollars but everyone has to get started somewhere.
Take this option only if you have an emergency savings and no credit card debt. No use opening an investment account earning 6 percent when you are paying 20 percent on your credit cad debt.
Buy Yourself Something Little
If the money is just burning a hole in your pocket, satisfy your need to spend but keep it responsible.
Take 100 dollars of your money and buy yourself something nice. Then take the other 500 dollars and use it more responsibly.
You get the treat of buying something and you can “do right” with the rest of the money.
Give It To Charity
Let’s say that you have a well stocked savings account and that you have no credit card debt. Let’s also say that you are currently investing and are in a very stable place.
If you absolutely have no immediate need for the money from your stimulus, consider giving the money to a favorite charity.
Unfortunately, there are a lot of people who are not in this kind of shape. Need is great at the moment and perhaps you should pay some of your good fortune forward.
Feel good about yourself, help people out and get a nice little tax deduction.