Stimulus checks are providing a welcome boost to households, and the best way to take advantage depends on your financial situation. If you were laid off or had your hours cut, you may need your check to cover immediate needs, like paying household bills or putting food on the table. For those fortunate enough to continue working through the pandemic, the $1400+ stimulus check may offer a chance to build up savings or invest for the future. This sudden cash infusion gives you the rare opportunity to get ahead. Here are some clever ways to use your stimulus check.
Expand your skills
Has your wallet stood in your way of learning something new or expanding your skills? Consider using your stimulus check to take classes online. Your expanded skillset can help you get a better-paying job or even let you pick up some freelancing work on the side.
Youtube offers plenty of free videos from creators to help you brush up on your graphic design skills, master social media marketing, or learn new ways to use Excel, for example. Online course providers such as edX, Udemy, or Coursera offer also classes that can be taken on demand.
Build your personal brand
The pandemic forced many of us to look at how we work differently. If you took on a few side jobs to make ends meet, perhaps this is the opportunity to start your own business online or at least build a personal brand.
You can setup a worldwide storefront by starting a website for your personal brand or new business. Low-cost, easy website builders are designed for freelancers and small business owners. For example sites like Squarespace, Wix and Weebly offer customizable templates, blogs, eCommerce platforms, and other online tools to help run your business. By following their step-by-step approach, you can create an attractive website to showcase your work or sell products.
Give your business a boost
If you have a business already, use your stimulus check to get the word out! You may be able to pick up new clients when you invest in social media ads, shoot a video, or update your website. Pulling out funds for marketing costs isn’t always easy, but extra funds can help with that budget.
Buy the equipment you need
Having the right tools in your home office can make a big difference in how efficiently you work.
If your home office is your couch or kitchen table, it might be time to invest in a comfortable chair and desk. A dedicated workspace can improve your efficiency and focus.
Technology changes quickly. If your computer is so old that it takes ten minutes to boot up or it can’t handle the latest software, it may be time for a new laptop or PC. Other technical equipment such as a scanner or dual monitors can improve your efficiency while you work.
Build an emergency fund
Even when times are good, an emergency can wreak havoc on your finances. If you live paycheck to paycheck, an unexpected medical bill or unplanned car repair can take months to recover from. If you don’t have funds saved up, you may have to charge this on your credit card or borrow money. Planning for a financial emergency can help you pay for the unexpected.
For many of us, the pandemic shed light on the need for an emergency fund. If you lose your job or are unable to work due to illness, experts suggest putting away between three and six months of your living expenses. While it could take months to save this amount, your stimulus check is a good start.
Invest your stimulus check
Your stimulus check provides an easy opportunity to start an investment account. If your idea of investing is letting your money earn interest in a bank account, you could be missing out. Investing in stocks, bonds, exchange-traded funds (ETF), or mutual funds that provide a return on your dollar may help you build wealth for the future.
An easy way to start is to set up an investment account through MoneyLion. Just answer a series of questions to create a customized investment portfolio that fits your risk tolerance. Access fully managed investment accounts for just $1/month, and you can even choose themed portfolios that embody what you believe in.
Make a donation
If you are financially stable, you may want to donate part of your stimulus check to a charitable organization. Not only does it make you feel good to contribute to a cause that is close to your heart, but it can also save you money come tax time.
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you may be able to deduct up to $300 from your adjusted gross income if you made a donation to a qualified charity in 2020. In 2021, this jumps up to $600 for those who file a joint return.
Before the CARES Act, you could only deduct charitable contributions if you itemized deductions on your tax return. This Act rewards taxpayers for their generosity.
Make your stimulus check count
It’s not every day that you see extra money in your bank account. If you don’t need your stimulus check to make ends meet, make it a point to invest in your future. Whether you decide to enhance your skills, start a new venture, or set up an emergency fund, choose a path where your stimulus payment has a longer-term impact on your life.
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