We don't intend to tell you how to use your covid-19 pandemic relief checks, but if you're still wondering the best way to use your stimulus check, here are five ideas we came up with.
1. Pay Down Debt
For most people, $1400 is not enough to pay off debt, but we'd like to think that it's enough to pay off your most urgent small debt. It's what Dave Ramsey calls the snowball method - the idea that by paying off your small debts, you set yourself up for success by gradually working toward larger ones. In the process, you also improve your credit rating. To see how fast you can pay off your debts using this method, use this calculator tool. Also, the eviction moratorium is extended. You could have a tax return coming due to the expansion of the child tax credit and $10,200 tax exemption for unemployment benefits, so depending on your situation, you might have much more than $1400. It could be enough money to erase your debt and start over again.
Yes, we know the stimulus checks are supposed to be spent to "stimulate" the economy, but think of your family first and what it would mean to have some savings. It would mean peace of mind for that inevitable future when you need a set of new tires or your child needs braces. According to Fool.com, another reason to save is that the economy is still not in great shape worse, and things can still get worse, "In April of 2020, the U.S. unemployment rate peaked at 14.7%. By February, it dropped to 6.2%. That's encouraging, but the jobless rate one year prior -- before the pandemic -- was only 3.5%. While there's reason to hope the economy will continue to improve, especially as coronavirus vaccines are increasingly available, many jobs aren't as secure as they could be. And having extra money in savings could be just what gets you through a period of unemployment".
3. Do Home Repairs
If you own your home, this might be the opportunity you have been looking for to finally upgrade that water heater tank or replace that cracked window. Fixing faulty items in your home or upgrading makes sense because, ultimately, it increases the value of your home should you choose to sell it. It's common knowledge that the longer you wait to repair something, the more expensive it will get because its deterioration means more repair costs. Simple home improvements like new paint will drastically change your home's look and feel, making you happier and less stressed. Other home items to consider upgrading for less than $1000 include bathroom updates, landscaping, replacing worn hallway carpet, and adding some energy-efficient fixtures.
4. Invest in EFT's
Speaking to Marketwatch.com, Eric Powell, founder of The Future Mill in Lakeland, Fla said this, “I would be looking for an ETF that provides exposure to as many industries as possible. This provides a growth opportunity for the future, but also offsets the risk of buying into individual companies that may file for bankruptcy.” However, this type of investment should be done by experienced people and ONLY if you are good in all other areas of your financial life and are looking at long-term investments. The world is still trying to understand EFT's even as EFT's are all the rave these days. The case for EFT's lies in the future, and if the pandemic has taught us anything, it's that digital is the way of the future, and there's no going back.
5. Pay for a Certification
Joe Biden has furiously defended the stimulus check for lifting Americans out of poverty but have you thought about how you can achieve this? After all, getting $1400+ and spending it all on consumer goods will still leave many living in poverty. The ones that will be lifted out of poverty are the ones that will spend that money as a downpayment for the future. one such way is to finally pay for that certification or some education that will allow you to gain meaningful work. For example, a certification as a Help Desk Analyst range from $49 to $549 for an annual salary of $50 000+. There are many more opportunities to lift people out of poverty, and you should consider it for your family.
These five ways are not all the ways. Figure out what will work best for your family situation for the long term and make a run for it. Such opportunities only come once in a lifetime. Let us know how you do!
By Clara Matonhodze Strode, Founder, The Multicultural Solutions Agency