Pandemic viruses are the mother of invention. Think about it! Within two weeks of the United States Congress passing stimulus legislation, the Internal Revenue Service (IRS), who would take several weeks if not months to provide taxpayers their refund, began issuing checks or direct deposits to over seventy-five million qualified individuals. While this issue is not the subject of my blog, I cannot help but ask, why does it take them so long to send me my Benjamins? Anyway, with social distancing and lock downs in effect we now have to deal with stimulus viral economics. How do you plan to spend your stimulus? Do you have a plan? What should you spend it on? Let’s highlight some options and controversy.
This is probably controversy #1. Should I really be giving the church 10% of my stimulus check? It’s a pandemic after all! Can I defer my contribution and catch up later? I’m already behind on my other bills. Is tithe a necessary expense? Send your thoughts and responses to: firstname.lastname@example.org let’s talk!
2. CREDIT CARD
Some who provide financial information may have a different view, but stimulus checks should not be used to pay your credit card bills. They can wait! While it’s not my considered recommendation to suggest ignoring your debt, this is an exception. Credit card payments are important but not necessary.
3. MORTGAGE /RENT
Now here is an expense worthy of top priority. Stimulus checks should be used to keep a roof over your head. Remember the average American rent is estimated to be $1,400.00. If your stimulus check is $1,200.00 then you have the perfect opportunity to take care as much of this expense as possible. Although this might seem like a no brainer, it’s worth mentioning: using your stimulus check to pay your mortgage or rent is a great way to use your stimulus check.
In the battle of critical choices between food or mortgage who wins? It is a difficult choice, but I would probably choose to spend the money on mortgage/rent. My thought is I can always visit a soup kitchen, church, food pantry, neighbor or some place for assistance. Although, one can argue that since under the law and national emergency your landlord or mortgage company will probably not be able to evict you, I would vote in favor of paying the mortgage/rent. This decision is influenced by several factors like your family size, how many kids are at home or elderly parents living with you. The point is, either expense would qualify for stimulus check spending.
When I say utilities I am thinking about electric, gas and telephone for starters. But this budget item begs the question, should stimulus checks be used to pay for cable bills? The answer is, do you need cable and if so, can you not find it at a cheaper price? Is cable a necessity? When considering whether or not to use your stimulus check on utilities ask whether or not the utility is a necessity and if you can get it elsewhere at a cheaper cost first.
6. CHILD SUPPORT
A client of mine text me this week to clarify whether or not her former husband’s stimulus check would be garnished for child support payments. I had to inform her that unfortunately he would receive his stimulus check despite his outstanding child support obligation. Does child support qualify as a necessary stimulus check expense? I would argue yes. The decision as to whether or not child support is a budgetary item to spend ones stimulus check on seems to revolve around which parent has custody or who is the child living with. But should that really matter? For the non-custodial parent, is this your child? If the child were living with you would not food and shelter qualify as necessary stimulus check expenses? Then such suggests that individuals should consider using their stimulus check to pay their child support.
There are at least 20 million plus individuals who have lost their employment. State systems and processes are not equipped to handle the deluge of people applying for unemployment. Additionally, it may take some time before the unemployed begin receiving payments. Due to such a crisis there are several non-profits and churches who are addressing the needs of those in underserved communities during this virus. If you are in the position to do so I believe donating to these organizations is definitely a worthwhile expense. Again, if you are in the financial position to do so.
8. EMERGENCY FUND
If you can afford it, put some into your emergency fund. While you may still be employed and able to work from home, nothing is guaranteed in this economy. It’s called a rainy day fund, because one day it’s going to rain!
In conclusion, spend your stimulus check on absolute necessities first. It’s government assistance tailor-made to helping you meet your most important needs. Needs you are potentially unable to meet due to the drastic shift in our economy due to the virus.