More than 88 million Americans have received their stimulus check payments, according to data by the Internal Revenue Service, with the average amount totaling $1,791. And millions more checks are on the way.
If you filed taxes as a single adult making $99,000 or less in 2019 or as part of a married couples earning $198,000 or less in 2019, you should qualify for some amount. And you can now track the status of your stimulus payments online.
How to get your stimulus check faster
To speed things up, you can also add your direct deposit information on the IRS website if those details aren’t already on file with the agency. (If you didn’t file taxes, you can still register to get a stimulus aid check on the IRS website or use Turbotax’s free tool to file a minimum tax return.) The IRS announced several enhancements with the Get My Check tool at the end of last week, which should make it easier for Americans to navigate the site.
But the IRS has also started mailing paper checks to Americans whose direct deposit information isn’t on file, and it will continue to send out new batches of checks each week. Checks can be as high as $1,200 per individual and about 175 million Americans are eligible for the payments, according to the White House.
If you’re among those receiving a check, how can you make the most of that stimulus check money?
The stimulus check can help you cover bills or move closer to money goals.
Julian Lozano on Unsplash
Use the stimulus check money to pay bills
The coronavirus pandemic isn’t just a healthcare crisis. It’s also had a significant impact on millions of Americans’ finances. More than 26 million people had already filed for unemployment by late April, and the Federal Reserve estimates as many as 47 million people may face unemployment before the crisis ends.
So it’s probably not surprising that a survey by YouGov for Forbes found 35% of Americans plan to use their stimulus checks to pay bills, and 16% plan to spend their stimulus checks on essentials—a reflection of how financially strapped many Americans now feel.
If you’re waiting for an unemployment check—or have seen your income drop significantly—and worry that you cannot cover your bills or expenses, it makes sense to put the stimulus check money toward them. A survey by Stellar Reviews released Monday found that among those who plan to spend their check, the top priorities were paying down debt, paying bills and buying necessities like groceries.
If you’ve been affected by the coronavirus pandemic and are struggling to cover bills, you can also contact creditors about reducing your interest rate or deferring or extending loan payments. Some creditors may waive fees if you missed a payment (or paid it late) if you agree to make monthly payments going forward and if you’ve made timely payments in the past. You can also ask that any late payments not be reported to the credit agencies, so your credit remains intact.
Many lenders—including credit card companies, mortgage lenders and the Department of Education (which announced borrowers can pause student loan payments for 60 days or more because of disruptions caused by the coronavirus)—have expressed a willingness to work with affected customers and offer waived fees and deferments.
If you have good credit and are carrying high-interest credit card debt, this is also a good time to look at balance transfer offers. Some credit card issuers are offering 0% interest offers for 12 to 15 months (though you will have to pay a balance transfer fee—typically about 3% of the balance—so be sure to factor that in).
Use the stimulus check money to bulk up savings
In the Stellar research survey, whose respondents were largely composed of millennials and moms, 69% of those surveyed said they planned to save the money from their stimulus payment. For those who are able to cover bills and essential expenses now without tapping this money, putting it toward savings can help ensure you can cover expenses in the future, too.
Financial advisors generally recommend that you have enough savings to cover three to six months of basic expenses. That said, a Bankrate survey found that a majority of Americans didn’t even have enough saved to cover a $1,000 expense before the coronavirus pandemic struck the United States. If you’re among them, and can afford to put the stimulus check into savings, it can be a great way to bolster your emergency savings fund and help you avoid going into debt to cover any unexpected expenses.
While interest rates are at historic lows, and the average interest rate for a savings account is a measly 0.07% as of April 27, there are some high-yield savings accounts with annual yields of 1.5% or more.
Invest the money from your stimulus check
If you are able to cover your bills and essentials and have a cushion of savings, investing your check can help set you up for the future. Nearly one in 10 of those surveyed by Stellar, and 4 percent of respondents of the survey by YouGov for Forbes, said they planned to do just that—with some investing toward retirement and others planning to invest in the stock market for mid-term goals.
Now can be a good time to invest in the market because stock prices are lower now than they have been in recent months. The stock market ended its record-long bull run and slipped into bear market territory in March 2020 for the first time in over a decade. While no one can predict the future, every single past market downturn has ended in an upturn with the market going on to set new record highs.
While the market has recovered somewhat from the drop from its recent all-time highs, the S&P 500 index, which tracks 500 of the largest stocks in the market, is at the same levels it was at last fall. So investors can pick up more shares than they may have for the same price even a few months ago. Investing in a diverse mix of stocks can actually allow the money from the stimulus check to grow even larger over time.