Got a Plus-Up Stimulus Payment? Here Are 5 Smart Things to Do With It

by Maurie Backman | Updated July 25, 2021 - First published on April 24, 2021

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A stimulus check from the U.S. Treasury on a computer keyboard.

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Did you get some extra money? Here's how to put it to good use.

March's $1.9 trillion American Rescue Plan Act includes a third round of stimulus checks worth up to $1,400 apiece. The IRS has been depositing those funds into people's bank accounts and sending out checks and debit cards for about a month now.

But you may have received two separate payments -- the initial stimulus check plus an extra payment. Those extra payments are known as plus-ups. They are catch-up payments for people who didn't receive the full stimulus funds they were entitled to.

Why might you have gotten a plus-up? Maybe you weren't entitled to a full stimulus based on your 2019 income. But if you've since filed a 2020 tax return with less income, that could've prompted the IRS to pay you extra stimulus. Similarly, if you had a baby in 2020, the IRS might not have known your family had grown until you filed your tax return. As such, your payment may not have covered that new dependent.

For some people, these plus-up payments may be relatively small. But even if your plus-up is only worth $100 or less, there are still plenty of ways to put it to good use. Here are a few options worth considering.

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1. Pad your emergency fund

If your emergency fund won't cover a job loss or medical emergency, boost it with any extra money you can. Whether you come into an extra $500 or a mere $5, those savings should be your first priority. Having a full emergency fund should trump all other goals, so even if your plus-up was modest, stick it in the bank if you're not fully set on emergency cash reserves.

2. Pay off pesky debt

If you're staring at multiple thousand dollars in credit card debt, you might think a small plus-up payment won't make a huge difference. But when it comes to busting out of debt, every little bit helps. Don't hesitate to use that cash to chip away at whatever balance costs you the most in interest.

3. Invest in self-care

Maybe you're all set with emergency savings and don't have unhealthy debt. If that's the case, your plus-up may be just the thing to improve your body and mood -- an important thing during a pandemic. Take that cash and buy a used bike so you can go out and get exercise. Or set up a massage appointment or a visit to a salon for a little pampering. It's been a very rough year for a lot of people, and you deserve to take the edge off.

4. Buy something you've deprived yourself of for months

Maybe your wages were cut during the pandemic, and so you've avoided certain luxuries you used to love. Perhaps you've missed store-bought coffee or dessert from your favorite bakery. If you're sitting on some extra cash and don't need to pad your emergency fund or pay off debt, it's time you indulged a little. Doing so could work wonders for your mental health.

5. Learn a new job skill

In a normal job market, those who are dissatisfied with their existing jobs would generally be advised to go out and find a new one. But in today's economy, it's no easy feat to land a new job. Perhaps you're frustrated at work and you need a specific skill to get a better job. Use your plus-up to take an online class that'll teach you what you need to know. There's a good chance jobs will open up later this year as the economy (hopefully) stages its comeback. If you prepare now, you'll be in a good position to present yourself as a viable candidate once that happens.

If your initial stimulus payment fell short, you may have gotten a plus-up -- or that extra money could still be on the way, depending on when you filed your 2020 taxes. Be sure to use that cash wisely, even if it's a small amount. This current stimulus round may be the last one, so make that plus-up payment count.

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