Okay… so you may be anxiously awaiting the direct deposit or you just got the money and have a lot of ways you may want to spend this money.
The $1400 or $2800 if you are married – so what are you going to do with the cash?
First, you need to assess your situation. Do you have any overdue utility bills or late mortgage payments?
Second, do you have any high interest credit cards that are not paid off. Look to see what debt you have and what debt is above 15%
Third, if the first two options are under control – you need to take a look at the emergency fund. What monies do you have in case of job loss or sickness or quarantine with no coverage of income? Everyone should have 3-6 months of income available and if you do not, then this should be a priority.
Fourth, make an extra mortgage payment. This seems trivial but living in my house for 6 years, I made a couple extra payments and when the house sold- I was amazed at how much it impacted the principal.
Fifth, if everything is shored up – the last item is add money to a Roth IRA. This is a huge, big ticket item that I personally do yearly and recommend others to do also. if you work in education – 403b and 457 are options that allow for Roth contribution.
A lot of people have told me that they are using the money for vacation and while that does seem like a great option- just evaluate if that is the best idea…Can you spend 1/2 the money and use the rest for one of the options above?
As seen tonight, France has entered another lockdown, I have a feeling we are going to see another rise of Coronavirus so be prepared for another financial impact soon. I just feel like …when something seems too good to be true (everything is opening!!!) then it probably is. I am going to hope for the best and prepare for the worst. My advice… go through these 4 Money-Smart Ways and stay with it!
Hugs to everyone!