After a lot of infighting, Congress has finally approved a second stimulus payment for $600 to most Americans.
Now, $600 is not really a lot of money. We could waste it really fast if we’re not careful. So, that’s why we need to use it wisely. Here are some ways to spend your stimulus money.
Smart Ways To Spend Your Stimulus Money
Hopefully, we can get $2,000 in stimulus payments, which President Biden is in favor of. Because this proposal has yet to gain steam in Congress, the thing to do right now is to save as much money as you can. Here are some ways to do that:
1. Start An Emergency Fund
If you don’t have an emergency fund, you should consider starting one. An emergency fund doesn’t have to be a huge amount of money.
What it needs to do is cover a certain amount of months for when times get rough. Target two to three months for now and see how it goes.
2. Pay Off Your Debts
If one thing is certain in all this, it’s that you need to have as much capital as you can. If you’re in debt from credit cards or late payments, you can put the stimulus money to good use.
Pay off your debts from the largest bill to the smallest. This way, you’ll escape those large interest payments that cost way more than the original balance.
3. Open A Savings Account
When great way to save money is by opening a savings account. Here’s how to go about it: Look for banks that have savings accounts with attractive APR, annual percentage rate, or interest rate stated in yearly terms.
The better your APR, the more money your savings account can generate.
4. Invest It In Your 401(K)
If you don’t know, a 401(K) is an employer-supplied retirement account. Typically, your job will match your contributions.
If you have some extra money hanging around (like a stimulus check) you could choose to add this money into your 401(K). This is an attractive option because your 401(k) is TAX FREE!
So all the money you put there won’t be taxed until, hopefully, it has multiplied through the years and you can live on it. Learn more about a 401(k) here.
5. Donate It
There are many charities that are looking for money right now. If you’re a foodie, you could choose to give to restaurant workers who are having a hard time.
The local hair salon industry is another segment that is accepting donations.
You also could simply give some of the money to people you know personally, whether they be friends or family. The point is to just give!
Up Next: When Is The Second Stimulus Check Coming?
If you’re looking for more ways to save money, here are some resources you should know about.
Interested in other ways to save or make money? Check out our Money Section:
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