20 Ways to Spend Your $1,400 Stimulus Check

Lawmakers in Washington, D.C., are all but certain to pass coronavirus legislation that will provide a $1,400 stimulus check to adults and eligible dependents. This will be the largest coronavirus relief payment yet, and it's important to use it as wisely as possible.

Here are 20 suggestions for getting the best value from the money the IRS will likely deposit into your bank account sometime in late March or early April.

The coronavirus pandemic has caused economic devastation for many. If you're behind on your bills or are struggling to make minimum payments, use your stimulus check to cover these necessities. That's what it's designed for, and hopefully it will give you a little breathing room.

Unfortunately, even if lawmakers pass the stimulus legislation quickly, it could be several weeks until you actually receive the money. If you need immediate help covering your everyday costs, coronavirus hardship loans could be the answer.

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Millions of Americans have paused mortgage payments by putting them into forbearance. And many renters haven't been able to make their bills. While eviction and foreclosure moratoriums have helped keep people in their homes, the fact is that past-due rent and mortgage payments will have to be made eventually.

If you don't need your stimulus payment to cover immediate costs, consider using it to repay back rent or mortgage payments.

ALSO READ: Judge Says CDC's Eviction Ban Is Unconstitutional. Here's What That Means for Renters

Generally, most people receive tax refunds. But 2020 was an unusual year that could lead to more people owing money than is customary. There are a few reasons for that.

If you received unemployment benefits and didn't realize they were taxable, you could end up owing the IRS money. You don't want to be caught off guard and unable to pay it when your taxes are due, so consider setting aside your stimulus money to cover the costs.

Coronavirus relief legislation also enabled penalty-free withdrawals from retirement accounts -- but you still owe taxes on the distribution at your ordinary rate. While you have three years to pay the taxes due (or to put the money back into your account), you may want to save some of your stimulus funds to pay these taxes if you don't intend to reinvest the withdrawn funds.

The pandemic has shown just how quickly unexpected events crop up that interfere with everyday life. The fact is, emergencies and income cuts happen all the time without any warning -- even when we aren't in a global pandemic.

If you don't have an emergency fund with three to six months of living expenses saved up, this should be a top priority for your stimulus dollars. Open a high-yield savings account and put the stimulus money into it right away to create your rainy day fund.

ALSO READ: Emergency Fund Drained During Coronavirus? Here's How to Rebuild

An emergency fund shouldn't be the only savings account you have. In fact, it's a good idea to have a few accounts open where you save for big purchases such as a car, a house down payment, appliances, or other items you can't afford to pay for all at once.

If you don't need the stimulus money immediately, use it to help you accomplish these other goals. You can divide the money among all of your different savings accounts, or put all of it into the one you're most excited about.

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If you owe money on credit cards, payday loans, or other high-interest debt, the stimulus check could be a great opportunity to make real progress on paying down your balance.

Use the money to pay down (or pay off) the debt with the highest rate so you can maximize the money it saves you on interest.

If you're eligible for a health savings account, consider using your stimulus money to make a contribution to it.

HSAs come with triple tax benefits. You can contribute with pre-tax dollars, grow money tax free, and make tax-free withdrawals when the funds are used for medical care.

With continued uncertainty surrounding the pandemic, it makes sense to set aside some money specifically for medical needs -- especially in a tax-advantaged account you can also use to invest for the future.

Investing your stimulus money in a traditional or Roth IRA can help you be better prepared for retirement.

You could also make an extra 401(k) contribution with your stimulus check fund. That's a little more complicated since you'll have to set up the contribution with your plan administrator at work and have the money withdrawn from your paycheck.

Still, if you aren't investing enough in your 401(k) to get the maximum employer match, this may be the best approach. Your stimulus funds could make it possible to get the free money that comes from employer matching contributions, which you would otherwise miss out on.

Retirement accounts are great because you get tax benefits for contributing to them. But there are restrictions on when you can make penalty-free withdrawals. And, in the case of 401(k) accounts, you'll have a very limited choice of investments.

If you're already contributing to retirement accounts, you may decide to use your stimulus money to also open up a taxable investment account with an online broker. You'll have much more flexibility about what to do with the funds -- and it can be fun to learn how to effectively manage your account on your own and pick good investments.

If you've been thinking about starting a company, your stimulus funds could be just the ticket to get it off the ground.

This could be an especially good idea if your career was affected by the pandemic and you want to go in a different direction and become your own boss.

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Unemployment remains high due to the effects of the pandemic. If your hours have been cut or you're out of a job, you may want to bulk up your resume. A stimulus check could give you the money to take a course that makes you a more attractive candidate when you apply for jobs.

Many schools are still offering virtual classes, so it's easier than ever to find a program that allows you to enhance your knowledge from the comfort of your own home.

The $1,400 stimulus checks are available both for adults and dependents. If you have kids, consider putting at least the money earmarked for dependents into their college savings accounts.

529 plans come with tax benefits and provide flexibility in how your children use the money for their educational needs.

If your kids are old enough, you may decide to use a portion of the $1,400 stimulus money for dependents to help them learn about investing.

This is easier than ever because of fractional shares. These allow you to buy portions of shares, so you don't need as much money to get started or to invest in big-name companies. With $1,400, your child could buy partial shares of any business they're interested in, and could split the money in a lot of different ways.

Considering putting money into an investment account and working with your kids to chose a mix of companies to invest in so they can build a diversified portfolio. Help them manage the portfolio and (hopefully) watch the money grow together.

ALSO READ: The Best Places to Buy Fractional Equity Shares

If you're a homeowner who hasn't refinanced your mortgage recently, you may be missing out on a great opportunity. Although rates have been climbing up in recent weeks, they still remain very competitive. If you can drop your rate, refinancing could help you save both on your monthly payment and total interest costs.

There are costs associated with refinancing, though. And while there are no-closing-cost loan options, these tend to involve higher interest rates or require you to roll the closing costs into your loan. Instead, if you decide to refinance, you could use your stimulus check to cover the up-front transaction fees.

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With many people spending time at home during the pandemic, interest in remodeling has grown. If you want to make upgrades to your space or make minor repairs, stimulus checks could help you fund the project without borrowing.

ALSO READ: 3 Options for Financing Home Improvements in 2021

If you don't need the stimulus money but your loved ones are struggling due to the virus, you may want to share some or all of it.

After all, there's an argument to be made that the government should've targeted the stimulus better to those who truly needed it. If you aren't one of those people, you may decide it makes sense to give it to someone you care about who was damaged by the pandemic more than you were.

Many local businesses were hit hard by pandemic-related closures. Consider using some of your stimulus money to support them by purchasing gift cards at stores you frequent.

You'll give them some much needed cash flow to help them stay afloat, and you'll be able to enjoy spending the money over time.

Giving back to your community can be a great way to use the stimulus funds if they feel like a windfall to you. Choose a charity that relates to COVID-19, or some other cause that's close to your heart.

Travel has been verboten for around a year, so you may be looking forward to the day you finally feel safe taking a trip again. If so, save your stimulus money so you can pay for it in cash without having to borrow.

ALSO READ: Should You Get a Vacation Loan in 2021?

This has been a hard year for most people. If you're in reasonably good financial shape and you want to use your stimulus funds for an impractical splurge, that's not necessarily the wrong approach. After all, practicing self-care is important.

Just make sure that your current needs are met first and that you're prepared for emergencies and upcoming big purchases. The last thing you want to do is regret the way you spent the check if you end up having to go into debt later because it turns out your finances weren't as stable as you thought.

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It's possible there could be a fourth stimulus check, but it's very unlikely. Pandemic cases are trending downward, and there's hope life will return to normal soon.

Democrats also have few options to pass legislation without Republican support. They're using a process called reconciliation this time to get the stimulus bill through, but there's a limited number of times they can do that. And with those on the right already objecting to the third stimulus check, they're unlikely to sign on to a fourth one.

All of that means this is probably the last payment you're getting from D.C. -- so be sure to use it wisely.