Suze Orman: 'Don't You Dare' Do This With Your Stimulus Check

The Money Lady's advice could potentially save you from making a big mistake with your stimulus check.

If you're like most Americans, you've recently received a $1,400 stimulus check deposited into your bank account -- or are going to get one any day.

These stimulus payments were authorized by the American Rescue Plan Act to help families cope with the ongoing financial damage caused by COVID-19. They will almost assuredly be the last stimulus payment you receive unless there's a dramatic change in the status of the pandemic.

That's why you should think carefully about what you do with your money.

Personal finance expert Suze Orman, also known as "The Money Lady," recently provided some very detailed advice on CNBC about both what to do and what not to do with those funds.

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There are a few things Suze Orman absolutely doesn't want you to do with your stimulus check

Suze Orman had strong words of caution for Americans who don't yet have jobs or whose financial life hasn't yet returned to normal. When discussing the best use for stimulus checks, she unequivocally stated: "Don't you dare use it to invest in the stock market."

While ordinarily investing for the future could be seen as a good thing, Orman's warning comes amidst a time when the stock market has been increasingly volatile and when many people have begun engaging in speculative day trading with hopes of getting rich.

Unfortunately, investing money you may need over the short term could be a disaster, even if you do it responsibly. That's because market downturns are a part of life and you could end up stuck having to sell at a bad time if it turns out you need the money.

While Orman's most stringent advice was to avoid investing your stimulus funds if you aren't in a good financial position, she also advised against rushing to use the money to pay off your creditors.

"Continue to pay the minimum on your credit cards and just play it safe until your job has returned and things are back to normal financially speaking in your life," Orman said. "Until then, do not take that money and go and pay down your car or do this or that."

Even paying back rent was the wrong use of stimulus funds in Orman's mind, with The Money Lady commenting "If you're going to use all of it to catch up on rent just to stay in your apartment and you still don't have any money left, don't do it, you're going to be sorry."

What does Suze Orman think you should do with the money instead?

Rather than investing the money, paying down debt, or getting current on rent, Suze Orman believes that you should save your stimulus money if you do not have an emergency fund.

She previously recommended that people have eight months of living expenses saved up. This is more money than most experts suggest for emergency savings. But with the pandemic dragging on for over a year already, she believes her cautious position has been vindicated. In fact, she's now even recommending you have 12 months worth of living expenses saved up.

"The key to your freedom is having that security, that emergency fund," Orman said. "Keep it right there."

That means if you want to follow the words of this trusted financial guru, you'll save your stimulus check unless all of the following apply: you have a 12-month emergency fund, you're currently employed, and your life has returned to normal financially.