6 Smart Ways to Use Your $600 Stimulus Check

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Wondering what you should do with your $600 stimulus? Here are the best options.

Many Americans have already received their $600 stimulus checks, either by direct deposit, debit card, or check. A $600 stimulus payment may not feel like a huge amount, but it could still provide some financial help. Of course, that depends on how you use it. Let's take a look at several smart ways you can use your stimulus.

1. Put it towards your bills

We won't spend too much time on this one, since it's the most obvious option. If you're having trouble paying your bills, it makes sense to use your stimulus for essentials.

Prioritize the most pressing expenses. For example, if you've been able to put some of your bills in forbearance, focus on the ones you still need to pay every month.

2. Boost your emergency fund

The COVID-19 pandemic has highlighted the importance of having an emergency fund. It's also made many people rethink the standard guideline of a three-to-six-month emergency fund and aim for 12 months' worth of savings instead.

Whether you had to drain your emergency fund during the pandemic or you'd just like to increase how much you have saved, $600 will give you a bit of extra financial security.

Make sure that you continue depositing funds whenever possible until you reach an amount you're comfortable with. If you don't have one already, we'd recommend you open a bank account specifically for your emergency fund that you don't use for anything else.

3. Pay down credit card debt

Most credit cards charge high interest rates. As such, credit card debt is one of the most costly and difficult types of debt to pay off. A $600 credit card payment is a good way to take a chunk out of what you owe.

If $600 isn't nearly enough to knock out your credit card debt, you're not alone. According to research on the average American household debt, the average credit card balance was $5,897 as of 2020. Here are a few ways you can pay off debt if you're in this situation:

  • Put any disposable income -- like this $600 check -- toward your credit cards. Even paying a small amount more will cut down on how much interest you pay and how long it takes you to pay off your balances.
  • See if you can qualify for any balance transfer credit cards. These cards offer a 0% intro APR on balances you transfer, which can save you lots of money on interest.
  • Check out personal loans for debt consolidation. You may be able to get a loan with a lower interest rate than your credit cards.

4. Contribute more to a retirement plan

Taking care of yourself in the present is the priority. But if you can pay your bills, have a stout emergency fund, and don't have any credit card debt, then another smart use of your stimulus is a contribution to your retirement plan.

This is a good way to get back on track if you had to pause retirement contributions or withdraw from your retirement fund in 2020. Even if that wasn't the case, an extra $600 in your IRA doesn't hurt. It will increase your retirement savings, and it can save you money on income taxes.

5. Treat yourself

There's nothing wrong with using that $600 to splurge on something you'd like, assuming you don't have any pressing needs.

2020 was a stressful year. Treating yourself with your stimulus is well-deserved. Whether you want to use that money for a new iPad, keep it handy for when stores have the PlayStation 5 in stock, or something entirely different, you should feel free to spend it on things that make you happy.

6. Donate it

In some welcome good news, many people have stepped up to help others during the pandemic. Recent data has shown millennials in particular are being super charitable. And when the first round of $1,200 stimulus checks went out, some opted to donate theirs.

If you don't need your $600 stimulus and you'd like to do good with it, then a donation is a great choice. You could give to one or more organizations you like or donate to people in your community.

Most people who qualify for the stimulus and haven't gotten it yet should receive theirs soon. The IRS began sending out payments on Dec. 29 and many Americans have already received theirs. Unfortunately, some may have to file their tax returns for 2020 to get their money -- you can check the status of your stimulus on the IRS site.

Once it arrives, there are all sorts of ways you can use your stimulus. Ultimately, it's a matter of picking the one that works best for your current financial situation and feels right to you.

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