With the recent passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act, you may be receiving a direct payment (stimulus check) from the government. For individual tax filers with incomes up to $75,000, you’ll receive $1,200, while married couples filing jointly with incomes up to $150,000 will receive $2,400, plus an additional $500 per dependent child. If you have delinquent obligations, the Treasury Offset Program may reduce the amount you receive. The IRS tells you what you need to know about Economic Impact Payments. As your friends in financial services, we want to share some advice for smart use of your stimulus payment during this unprecedented situation.

Cover your expenses or create an emergency fund.

We recognize that for many of us, the money will go toward immediate needs and expenses, such as rent, utilities or groceries. Serving as a small bridge for the average person is a primary purpose of the stimulus money. So, if you need to use the money on essentials, you should know that doing so is the right thing in this challenging time.

Then, if you don’t need some or all of the money for emergency expenses right now but also still need to build up an emergency fund, keep it around. Most financial professionals advise having at least three months of emergency expenses in savings. $1,200 can make a nice start to an emergency fund, which will enhance your own safety net for the future.

Pay down debt.

If you don’t need to use the money on essentials right now and already have your emergency fund squirreled away, put the money toward any outstanding debt you might be carrying. Consider using this bit of money to lighten your burden for the future by knocking those balances down while you have this extra money available.

Spend it locally.

Lastly, if none of the above scenarios apply to you and you have the means to do so, we encourage you to consider supporting local small businesses in your community. The other purpose of the direct payment checks, besides temporarily assisting individuals and families, is to stimulate the economy through spending, helping keep businesses open.

Though social distancing guidelines have changed the way we can do this, we can all still support our local businesses in various ways. Maybe we can place an order online or buy a gift certificate for future use. Maybe we can order delivery—making sure to be generous with our tips to support the delivery drivers, too! Or, maybe we can simply share positive feedback on the company’s social media platforms or via word-of-mouth with friends and family. Anything we can do to help each other out during this time benefits the community at large. Remember, we’re all in this together.

Want more info on stimulus checks? Select the button below to get details from the IRS about Economic Impact Payments, track your stimulus check, enter direct deposit info and more.

Learn More About IRS Economic Impact Payments

Follow guidance from the IRS for the most up-to-date instructions and information, including details on eligibility and circumstances that warrant returning a stimulus payment. As the IRS releases more information related to stimulus payments, such as rules about payments made to deceased individuals, our policies may be updated accordingly. We appreciate your patience as we navigate the ins and outs of current governmental regulations and do our best to stay ahead of the curve.

This information is accurate as of the date posted.

---

Posted In:

• COVID-19 Education