How Should You Use Your Stimulus Payment? Make It Work For You

Many Americans have received the Stimulus Payment and for most it will serve as a vital lifeline, helping them pay their mortgage or rent, or purchase food and other essential goods. For others, it will offer an opportunity to pay down debt or shore up their savings. Depending on your situation, one or more of these strategies could help improve your financial outlook.

  1. Take Care of Your Essential Needs
    First and foremost, it's important to use this money to take care of yourself and the people in your household, making sure that you maintain your health and keep a roof over your head. If you're experiencing financial hardship, consider using this money first to pay for essentials like housing, food, utilities and medicine. If you're still leaving the house for work, these essentials could also include things like gas, auto insurance and other related expenses that you need for everyday life.
  2. Make Debt Payments
    If your essentials are covered, you can use this money to ensure you make all your debt payments, such as credit cards, auto loans and debts. Remember, making at least your minimum payment is better than missing a payment or making a late one. Many lenders are also offering relief measures right now to those affected by the coronavirus crisis, so even if you don't think you'll miss a payment, it might be helpful to contact them to find out if you have the option to conserve your cash for future essential expenses. Just be sure you know the terms of any possible relief measures your providers are offering.

    It's important to understand that, although you may not have to make payments, interest could still accrue when your account is in forbearance, which means your loan payments are postponed or reduced. If it does, you will have to repay that interest, which could cause you to pay more over time. However, that may be a worthwhile compromise to protect your credit through this difficult period

    If you don't think you'll be able to make a payment, let your lender know in advance, as they may be able to work with you on a solution.
  3. Save for Future Expenses
    In this unprecedented and ever-evolving situation, having extra savings could come in handy should any unexpected expenses arise. If you have money left over after buying essentials and paying your bills, consider putting it into a savings account you can use to cover expenses in coming months. Times of crisis often create emotional voids that some people tend to fill with spending. It's important to recognize if a purchase is a need that will get you through the next few weeks or months or a want that can be postponed for a later time.

If you have concerns about meeting your financial obligations, please give us a call to discuss how WKFCU can help you.

If you still have your regular income, this may be an opportunity use your economic impact payment as a downpayment on a large-ticket item such as a car, boat, ATV, RV or something else. We can help.

Do Your Research and Shopping on Autolink, our car-buying service, on our website. www.wkfcu.org.

Reprinted in part from the Experian.com blog.

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