Spending and Saving Your Stimulus Check

Personal Money Planning |


By Gary Silverman, CFP®

The check is in the mail.

Actually, if you’ve received your stimulus money (that’s the $1200 the Feds are sending out), it’s likely been through direct deposit. For those of you who are due the money who didn’t link a bank account with your tax return, you will get a check, but it will take longer.

No matter how you get the money, the next question is what to do with it. That’s what today’s article is all about. Disclaimer: I don’t know you or your circumstances, so learn more or get personalized advice before doing anything.

Desperation: You’re out of work, out of money, and can’t pay your bills. You already know what you’ll do with the check. If you think this will lead to bankruptcy, then use some of it to get legal advice on what bills you should concentrate on. Food and shelter come to mind.

Reserve: You’ve still got a job, but you have little or no savings. You know that emergency fund I write about now-and-then? This money can be stashed away for that specific purpose. Yes, I know you’d rather buy a new game, have dinner delivered, fix up the bathroom, or otherwise spend the money. If your emergency fund is empty, it’s not the time. Save it.

Invest: You’ve still got your income, have an adequate emergency fund, but have done little to prepare for your future needs. These include retirement, college for the kiddos, your next car, and other items you would describe as needs. In this case you should invest the money in a way that makes sense for those needs. Shorter-term goals can be kept in something safe, longer ones can go into a diversified investment plan (stocks, bonds, and the like). These expenses are going to come up and you need to save for them.

Options: Okay, you’ve got a job, have an emergency fund, and are already saving enough for your identified future needs. You have options. Here are some to consider…

  1. Do what the stimulus is designed to do…stimulate the economy. In other words, go and spend. Start local—most every local business is hurting in one way or another. You’ll be helping your community and your neighbors by keeping the local businesses going and their staff on the payroll. Or go direct—you don’t need the money, but you know someone in the Desperation category, so give it to them. Don’t know someone? Then support the charities such as the Salvation Army, Food Bank, Interfaith Ministries, and a myriad more that support the folks living around you.
  2. Have fun. Time to have your wants. You can buy a new game, have dinner delivered, fix up the bathroom, or otherwise spend the money. Notice how you can often do #1 and #2 at the same time. And they both help stimulate the nation’s economy. This is more about the motivation behind it, and the fact that you will not limit your spending to the local economy.
  3. Invest for a brighter tomorrow. Putting more money into your investments will give you more options in the future than what you are already doing.

Whatever you do, I pray that you will have wisdom in doing it.


Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing.