The coronavirus created a substantial economic fallout where more than 60% of Americans lost their revenue streams and income sources. The government started issuing stimulus checks to support the people and the economy.
Stimulus checks were part of the government’s strategy to support purchasing power which in turn allows the economy to remain afloat. The government might release some more stimulus checks based on the current economic performance. If it does happen and you receive a stimulus check, then you should consider ways in which you can maximize it. Here are some tips on how to wisely use the stimulus money.
Create an emergency fund
The pandemic proved that it is vital to always be prepared, and one of the ways to achieve this is by creating an emergency fund. Having an emergency fund will put you in a better position to handle the unexpected. Many people do not have an emergency fund, but this year’s events have indeed demonstrated the need to have one.
Refinance your mortgage
Hard economic times caused by the pandemic made it difficult for many people to keep up with their mortgage repayments. Refinancing your mortgage is a smart move because it will reduce your monthly mortgage repayments, thus easing your financial burden. Doing so might also give you a chance to reduce the interest on your mortgage repayments which means you end up paying less.
Ease some of your high-interest debt
Credit card debt is notorious for high-interest rates, and it is unsurprisingly the most common type of debt in America because it is quickly and easily accessible. Using some of your stimulus check money reduce credit card debt and other types of high-interest debt is a smart move because it will protect your credit score, allowing you to secure a credit line with ease further down the road.
Reduce unnecessary spending
Remember that a stimulus check gives you access to a limited amount of money. You should thus plan for it wisely and avoid unnecessary cash outflows. For example, avoid eating out, work out from home and focus on necessities rather than luxuries.
Learn some new skills
Lockdown presented the ultimate opportunity for people to learn new skills through which they can potentially earn some extra cash.