5 Smart Ways to Invest your 1200$ Stimulus Check for the Future

So if you haven’t heard there is a federal stimulus check coming out in response to the Corona Virus pandemic. The stipulations are that if you have an income under $75,000 you will get a $1200 check into your account. If you make over $75,000, First of all good for you because that is a healthy income. Second of all you will not get your full stimulus check (sad face).

But if you make over 75k you will have 5$ taken off of your $1200 dollar stimulus check for every 100$ over 75k that you earn. This amount is determined by your 2019 Tax return Adjusted Gross income (AGI).

So depending on that information, you may get some money during these crazy unprecedented times in the economic environment. Next we will chat about 5 ways to Invest your Stimulus Check.

1. Build Emergency Fund

The first thing that makes sense to do is to stash this money away for what it was intended for. This is to give individuals a way to pay for necessities if they have no money or income such as food/rent. This can be a great options whether you are getting 100$ or 1200$ to start building an Emergency fund for times just like these.

From anyone I have talked to there has been much less stress experienced by those who had a nice emergency fund during this Corona virus market crash than those that don’t have any emergency savings. Especially for those who had lost their jobs. A 1000$ emergency fund can go a long way, and for those times where you don’t have any funds and you need to pay for life’s needs you will thank yourself for this safety net.

Although a very boring financial move this can be super rewarding, when that hard time falls and your stress levels are 10x less because you have some reserve funds to cover things until the storm passes.

2. Invest

The second way to Invest your Stimulus Check would be to… well actually invest that money into the market dip and watch it grow. Now is one of the better times in the past decade to invest, as the market has hit a historic drop from its Bullish peaks where it was prior to the corona virus outbreak.

You can think of stocks being on a very large discount at this point in time and that investing now can somewhat be looked at as a hedge from the losses you just accumulated from the past months time in your investment accounts.

I would recommend investing into a retirement account such as a traditional or Roth IRA to further save by missing out on some taxes. Another option is to invest in any low cost index fund and watch this grow over time. You will be thankful you did this in a few years, so this is another great way to build your wealth.

3. Save for Future Purchase

This can be a great amount to bolster current savings or to give you jumpstart on starting a savings goal. Don’t think here of things like a new TV or new computer/cell phone. Use this money for starting savings toward something that is going to positively improve your life in the long term.

This includes possibly things along the line of an investment property, a future home, a business venture, a wedding ring, your college savings, savings for your child’s future, a wedding, a desired medical procedure, and other life impacting options that require some funds.

This can be a great way on start saving your money and working toward a goal that you may not have felt possible, but with $1200 started to save toward this goal it may suddenly feel in reach and light the fire.

4. Pay off Debt

Honestly this should be higher on this list, as the average American is severely buried in debt. This can be an amazing thing to allocate this stimulus check towards. Just think of where you would be during this pandemic market drop if you didn’t have any debts. That’s right it would be a land of much less stress and fiscal responsibilities, making it much more palatable to ride out this market drop.

Paying off debts big or small can be life changing; this amount may not be enough to feel like it makes a dent on your debts but it could be used to pay off some of your smaller debts and create a feeling of much more impact. Also this could be directed towards debts with much higher interest such as a credit card balance or pay day loan.

Pay off some debts, you will NOT be sorry!

5. Donate

If you are not in debt, have a job, and are not in need of any stimulus help to maintain your current lifestyle and basic needs during these tough times. This option I hope is one you may lean towards. There are so many people out there that have been severely effected by this market collapse with corona virus spreading through our nation and our world.

Many have lost jobs, lost their ability to cover rent or pay for food for their young ones. These individuals are losing sleep wondering how they are going to have enough money to live.

These mostly aren’t people who didn’t work hard or didn’t follow the rules and got fired. These are people who may have worked very hard to get the job they had, and then were instantly laid off when their company was forced to shut down due to the virus.

Some options include a friend or person you know that has fallen on tough times, a local charity to support those in your community with food, or a nation wide charity. When choosing a charity make sure to do your research and ensure a large percentage of your donation is going toward your cause.

Some great charities for this time are ” America’s Hungry Children” and “Good360” which both allocate 99cents of every dollar donated to their cause.

Use Your Stimulus Check for Something Worthwhile

Whether it be saving for something or someone special, investing, paying off debt, donating to humans in need, or building an emergency fund… there are many ways to use this money for good. You can greatly effect your own or someone elses future with this stimulus check. Based on your situation determine what is right for you and go do it!

Thank you for reading.


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