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Five Ways to Use Your Stimulus Check

By: Bill Van Sant, Senior Vice President and Managing Director, Girard, a Univest Wealth Division

Beginning last week, millions of Americans who qualified for a COVID-19 “Economic Impact Payment” began receiving these stimulus checks via direct deposit. Now what? Considering this is a one-time tax-free payment, you must have a game plan on how you will use and allocate these monies during these unpredictable times. Here are several ideas to consider.


Prioritize your spending:

If your income is impacted by the shutdown related to the COVID-19 pandemic, this stimulus check is much needed. Make sure you understand precisely how much you spend each month to maintain your standard of living and try to use this money to fill in any shortfall for the next month or so until, hopefully, you can increase your income to the level before the pandemic. If you have rent/mortgage, credit cards, and auto loans, instead of using these monies to make your regular payment, talk to your landlord or bank to see if they can work with you during these unprecedented times. Many banks are offering forbearance options during this pandemic, which will allow you to use more of your stimulus toward crucial areas such as food, medication, and utilities.

Start an emergency fund:

If your income has not been affected by the pandemic, consider using this stimulus to create or add to your emergency fund. What is an emergency fund? An emergency fund is a safe and secure savings account that has six months of living expenses set aside. So, tally up your monthly living expenses such as a mortgage, utilities, food, etc., and multiply this by 6. The result should be the amount that most planners suggest having in an emergency savings account. With a family of 4 expected to receive $3,400, this would be an excellent start to an emergency fund! Be sure not to commingle this amount in your checking account as having it in a separate savings account means you are less likely to use for everyday expenses.

Pay down Debt:

If you are maintaining your pre-pandemic income level, then consider paying off debt, especially if there is little left on your loan balance. Pandemic or not, paying off debt is always a smart decision, and this stimulus check could be the boost that you need to get debt-free.

Invest for the future:

If your income has not been affected by the pandemic, and you are a long-term investor, consider taking advantage of the recent market downturn associated with this crisis. It was just several months ago that the markets were at an all-time high. Now that the markets have pulled back, if your tolerance for risk will allow it, consider opening a brokerage account, Roth IRA, or even a 529 college savings plan and investing some of the funds. While nothing is guaranteed, history has shown us that in the long run markets tend to stabilize and grow further.


If your finances are in excellent shape, then consider using your stimulus to help others. You can do this by giving directly to groups or individuals with the greatest need (e.g., your local food bank). Additionally, you can consider establishing a Donor Advised Fund (DAF) that will allow you to contribute now but donate to specific groups later. The DAF is a way to both be philanthropic and receive possible tax advantages.

In summary, once you receive your stimulus check, take time to carefully review your current financial priorities to see how to allocate best this one-time payment that makes the most sense for you and your family. If you have any questions on how to best proceed, please reach out to your Girard Wealth Advisor.

Stay safe.


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This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. The information in this article, and any opinions expressed therein, do not constitute a recommendation or an offer to buy or sell any security or financial instrument. Viewers should consult with their financial and/or legal professionals before making any financial decisions.