The stimulus funds promised in the Coronavirus Aid, Relief and Economic Security (CARES) Act are starting to land in bank accounts and mailboxes around the country. The $1,200 is a welcome relief for many of us during these trying financial times.
Many of you may be pondering the best way to use this money so we compiled a list of advice and tips.
#1 Cover your basic life expenses first
First and foremost, make sure you cover your basic necessities. With millions out of work and a good percentage of us still waiting for unemployment insurance to kick in, many Nevadans are struggling to put food on their tables.
This means you likely need to create a new budget where critical needs such as food and shelter need to be at the top of the list and expenses such as personal care memberships, subscriptions, and entertainment go to the bottom.
#2 Build your emergency fund
If you've already got your basic needs covered, we recommend you start looking at longer-term targets like building an emergency savings fund. Emergency funds should ideally be robust enough to cover 3-6 months' worth of living expenses, but anything you can set aside now is better than nothing. If you already have an emergency fund and had to dip into it due to the pandemic, use your stimulus funds to help replenish it. It's a great idea to build a cushion to fall back on during lean times that are likely to come in the months ahead.
Tip #3 Pay down high-interest debts
According to the Federal Reserve Bank, Americans owed a collective $930 billion in credit card debt during the fourth quarter of 2019. Using some of your stimulus check to pay off high-interest debt would be a great way to get a guaranteed return on the money, This advice only applies to credit cards and other private, high-interest loans. The federal government put a six-month freeze on most student loan debts, so they should not be as high of a priority right now.
Tip #4 Boost your longer-term savings
If your emergency fund is already full and you've made headway on your debt, it can be a good idea to use some of the stimulus money to add to your longer-term savings for a future vacation or down payment on a home when things get back to normal. If you'd rather invest in a more long-term savings plan, give One Nevada Investment Services a call for a complimentary consultation with one of our financial advisors. Call 800-388-3000 x 4323 or visit oncuinvestments.com.
If you struggle to pay bills in the coming weeks, please give us a call at 800-388-3000, and we'll explore all option to help you get through this. You can also visit our COVID-19 Resource Center for links to government resources and organizations where you can learn about and search for services for which you and your family may qualify.