Don’t Spend Your Covid-19 Stimulus Check
The government wants you to boost the economy. But boost your own bank account first.
These are not your friends.
Source: Bloomberg
It looks like congressional Democrats and the White House will get those $1,400 stimulus checks out the door in the next few weeks. Economists and the government are hoping you spend 100% of that money immediately to boost the economy. A booming economy would be a good thing, but that doesn’t mean you should spend your whole check. Instead, consider this a once-in-a-lifetime chance to chip away at your debt, pay off high-interest credit cards or start building your savings.
Having more cash on hand will be a good thing. Many people, according to the Fed, can't even find $400 if they need it. When people don’t have emergency funds, their lives can spiral out of control. People in debt find themselves more likely to ask family and friends for loans and gifts, which can strain relationships. Without a cushion, people become more likely to draw down their retirement savings, use credit cards or payday loans, pawn or sell possessions, and take on extra jobs. No wonder people in debt are more unhappy and stressed. Saving some of your stimulus check may be able to save you from these negative effects.