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4 Smart Things to Do With Your Coronavirus Stimulus Check

By Christy Bieber - Apr 18, 2020 at 6:01AM

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Make wise use of the funds the government is providing.

In response to the COVID-19 pandemic, the U.S. federal government passed a $2 trillion stimulus bill, the Coronavirus Aid, Relief, and Economic Stimulus Act or CARES Act.

The Act does many different things to help Americans, including giving most people stimulus payments of $1,200 per adult and $500 per child. You'll receive the full amount with an income under $75,000 for singles and $150,000 for married couples filing jointly, and the size of your check will be reduced by $5 per $100 above income limits. Singles with incomes above $99,000 and married couples with incomes above $198,000 won't get any stimulus funds.

If you're getting a check and don't need it to cover rent or other essential bills in the short term, you'll want to do something smart with this money. Here are four good options.  

Woman with calculator and note pad.

Image source: Getty Images.

1. Save it

Americans are experiencing unprecedented financial uncertainty. There's no projected date when social distancing measures will end or we'll return to business as usual. During these turbulent times, it's more important than ever to have emergency savings.

Saving your stimulus check can provide you with money to see you through if you experience an income shortfall, are waiting for unemployment benefits to kick in, or need to cover medical costs.

Ideally, you already have an emergency fund with enough money in it to cover three to six months of living expenses. But if you don't have a lot of financial reserves, saving your check is probably the best thing you can do with it. 

2. Invest it

If you've got enough savings already, investing your check may be the smartest choice.

The stock market has gone sharply down in recent weeks in response to the economic uncertainty resulting from coronavirus, but history shows markets always come back after downturns.

Trying to time the market to when it hits its lowest point is impossible without a crystal ball, but you don't need to buy at rock bottom to make money over the long term if you buy and hold during these tough economic times.

Although investing isn't the best idea if you'll need your check to cover costs within the next five years, you could be very glad in a decade that you invested today if you use your stimulus funds to buy when stocks are on sale and you get in on the inevitable market recovery. 

3. Pay off debt with it

Owing money means you'll need more monthly income, since you have to use some of it to pay creditors. This could become a problem if your income is cut by the economic fallout of coronavirus.

And when you have a lot of debt to pay, the interest costs also mean you have less money to do other things, such as bulk up your emergency fund or invest during a downturn.

If you can use your coronavirus check to pay off some of your debts, you won't have to worry about those bills if your economic situation worsens. You'll free up the cash you were sending to those creditors to use it for more important things during these troubled times. 

4. Use it to support first responders or local businesses

If you're in a good financial place right now, why not use your money to help others?

You can donate to funds that support the coronavirus response, or can even do something as simple as buying gift cards from your favorite local business to give the company some cash now and help them stay afloat until they can return to providing regular service. 

Make wise use of your stimulus funds

If you need your stimulus money to pay essential bills, you shouldn't worry about using it to cover your costs -- that's what the money was there for. But if you have the choice of how to spend your money, aim to make good use of it so it helps you become more financially sound or helps those in your community who need it most. 

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