There’s nothing quite like a sudden windfall of cash, right? In the past year, Congress approved a $1200 stimulus in March and then a second, smaller $600 stimulus in December. If the Biden Administration’s plan to increase the size of the stimulus to $2,000 goes through, people who qualify might be seeing $1,400 in additional stimulus money. For some struggling families, this is a lifeline that can’t be overstated.
For those struggling, the course of action with the money is clear. Bills that are outstanding, groceries and new clothes for the family will probably be in order for those suffering the most from the pandemic and ensuing recession. However, for those who are more financially secure, the question of what, exactly, to do with the stimulus money might be lingering.
What to do with the Stimulus Money
If your immediate needs are covered and the stimulus money is simply a fortuitous windfall for you, congratulations! Not only are you already financially comfortable, you now have an extra $1,400 to play with. This money can be spent in lots of ways, but maybe you can do something more with it than buying video games and action figures.
One option could be to simply invest the money into the stock market. Find some reliable stocks that can guarantee slow, steady growth, invest the money there and then let it just accumulate interest for you. This can function as a nice rainy day fund to tap into one day when finances get a bit tight! Essentially, by doing this, you’re “buying” money with your money, essentially for no cost to yourself aside from the opportunity cost.
If you didn’t need that money for anything urgent, this is a no-brainer.
Along those same lines, you could use the money to pad out your retirement fund. If you haven’t saved anything for your retirement yet, this is a great first step. $1,400 is a solid little chunk of change to start investing with, and it can quickly grow to much more than that in the right accounts.
Likewise, you could reinvest the money in your own property. Are there some projects around the house that need attention? Maybe you’ve been looking to get a new HVAC unit put in, or your house needs new gutters? This is a great investment in your property’s value and will also result in your home being that much nicer to live in.
The same could be said for things like car repairs, doctor visits and the like. In short, if there’s spending you’ve been putting off, this money can help you address it right away. Remember: this is your money, paid back out from your own tax dollars. Don’t be afraid to spend it on what you need.