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6 ways to spend your stimulus check, no matter how much money you get



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How will you spend your stimulus check money?

Sarah Tew / CNET

A third stimulus check for $ 1,400 could be available soonLast week, the House of Representatives released details for one $ 1.9 billion aid package , and over the next week it plans to wrap up more of the ins and outs to get a bill ready for a vote.

The most recent payment of $ 600 maximum per person should have found its way into most’s accounts qualified Americans, although the IRS has confirmed that millions of people are still missing checksIf you haven’t gotten it yet, you can still get one Clawback discount on a tax return for 2020even if you have a nonfiler, someone who doesn’t normally file taxes(Your possible third stimulus check Could be too affected by your 2020 tax return

A 2021 Bloomberg survey found that nearly two-thirds of respondents plan to issue their incentive vouchers immediately, while just over a third plan to bail it out. Whether you have already received your stimulus check, wait for your payment via a tax returns or look forward to one third stimulus check (here is who qualify), here are six ways to make the most of your payment.

Deal with your most pressing needs first

First of all, make sure your immediate needs are met. This includes food, monthly bills and rent or mortgage. But before you prioritize rent over food, for example, consider that many jurisdictions, utilities, and even banks are providing relief from the pandemic. Find out which programs you can take advantage of and then allocate resources. President Biden, for example, extended the moratorium on deportation until March 31.

Set aside some money to pay your 2020 taxes

Tax season has begun and it is clear that the IRS will not delay tax returns like it did last yearThis means that the taxes are due in two months at the latest. Stimulus controls are not taxed according to the IRS, but unemployment benefits will be. If you don’t need to use the $ 600 immediately, you can keep it on hand to help with your taxes to cut the sting when it comes time to pay.


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Delete your credit card debt and loan balances

One way to secure your financial future is to reduce your debt. A significant payment made to pay off a credit card and loan will help reduce the amount of interest paid into an account with a balance. The less interest you pay, the more money you will have available in the future. But before you do that, check with the debt holders as some offer relief, including deferred payments and forgiven interest. Just be sure to read the fine print, as some of the help provided can slow interest rather than forgive.

Start or add to an emergency fund

The importance of having an emergency fund cannot be overstated. As this pandemic shows, the world can change very quickly. The fund should be equal to the amount spent on expenses during three to six months. While the The $ 600 stimulus check will not cover that entire amount, it can be used as a starting point. If you’ve submerged or even exhausted your emergency funds, the stimulus check can help you get back on track. A simple savings account can be used to keep the money safe.

Donate all or part of it to those in greater need

Those lucky enough to not need any of the $ 600 for themselves should consider giving it to those who do. There are still many charities fighting the pandemic, such as food banks and hospitalsAnother consideration is to help friends and family members who have been hit hard by the pandemic.

Open a long-term investment account for a child in your life

Part of the aid package provides an additional $ 600 per child. If your family is already comfortable, there is a way to use that money to help your kids’ future.

“If you don’t need this money, consider opening a 529 plan for your child,” said certified financial planner Marguerita Cheng. “Your state can provide a tax break. This money can become tax-free. You can even contribute a modest amount of say $ 50 to $ 100 on a regular basis, if necessary.”

To start a 529 plan, contact your bank or investment firm to see what they have available and what benefits you get when you open one.


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