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Stimulus Check Tips: How To Really Put That $1,200 To Work

Andrea Woroch  |  July 6, 2020

If you're still employed, you may be unsure how best to use your stimulus check. Here's a look at how to use it wisely. 

By now, most all Americans have received their stimulus checks. If you’re still wondering where your money is, you can check the status of your payment at the dedicated site.

If you and other members of your household are still employed and you haven’t lost hours or pay during this time, then you may be looking for the best way to use this money to create financial security for you and your family. Ultimately, the next steps you should take all boils down to you and your family’s financial situation. Even if you haven’t experienced any disruption in income, you still need to consider the “what if” scenarios and create a financial plan for the future. To figure out how to use your stimulus check wisely, follow these tips.

Prioritize bill payments.

Although many lenders and monthly service providers are allowing customers to defer payments, some may continue charging interest which means you could owe more down the road. Therefore, it’s important to research which payments you can defer with no interest or penalty to make the best decision on which bills to pay right now and which ones you can hold off on. For instance, the Federal Student Loan freeze means you can defer payments without interest piling up, so this is something many people should defer if they’re feeling cash-strapped. On the other hand, private student loans will continue accruing interest if you defer the payments. That means the unpaid interest may be added to your final balance and you will end up owing even more than before. In this case, it’s best to prioritize paying your private student loans over federal ones when figuring out which bills to pay. You may find this similar issue with your credit cards and mortgage, so just call all your creditors first.

Boost your emergency fund.

According to a recent survey, about 1 in 6 Americans don’t have any savings at all, which is a scary position to be in during these very uncertain times. Even if you have a job now, the future economic impact of this pandemic is uncertain, and stashing your stimulus check for emergencies will give you a cushion in your budget to cover unexpected expenses and help you get through any tougher times that may come. To create as much financial security possible, aim to save 6 months of living expenses in a separate account. If you’re unsure of how much you actually need per month to survive and not make any drastic life changes, calculate your monthly rent/mortgage, utilities, groceries, out-of-pocket healthcare expenses, insurance and other necessary bills. If the thought of saving this much money stresses you out, remember that something is better than nothing. Opening a high yield online savings account is a great place to put your savings since you can earn much more in interest compared to a traditional brick and mortar bank. Plus, this ensures your savings are out of sight and out of mind, so you won’t be tempted to dip in.

Pay down debt and protect your credit.

If you feel good about how much you have in savings, paying down your credit card debt will instantly give you a financial boost. You will spend less on interest every month, and that savings can go toward other essential expenses. Plus, lowering or eliminating credit card debt gives your credit an instant boost. Take it a step further by applying for a credit card that offers 0% interest on balance transfers for anywhere from 12 to 21 months. This will buy you more time to pay down the balance without accruing interest every month. You can even use a small portion of your stimulus check to protect and increase your credit score. Apps like Self offer credit building loans that boost your score while you save. Instead of getting money upfront, you make payments toward yourself for 1 to 2 years and the company reports your payments to all three credit agencies. Once the term is up, your payments unlock in the form of savings along with a better credit score which will make it easier to obtain loans at better interest rates.

Create an online will.

A recent survey found that more than 60% of U.S. adults do not have an estate plan, even though most people know they need one. Many people put it off because the process can seem confusing and expensive, but if there’s anything the coronavirus outbreak has taught us, it’s that life is unpredictable, and buttoning up your finances can give you peace of mind that you and your family will be protected no matter what. The good news is, you don’t have to pay high legal fees to get your documents sorted out. You can create a will online right from home using sites like, which offers step-by-step instructions and live chat support to help you through the process. You can create an online will for just $70 in 10 minutes, or even set up an online trust. By doing this, you’re only trading a fraction of your stimulus check for financial security. 

Limit spending to essentials.

You may be tempted to buy those shoes you’ve been drooling over since they recently went on sale, but now is not the time to go on a shopping spree. Even if you haven’t experienced a disruption in income, the long term economic impact of coronavirus uncertain, so saving your money and avoiding non-essential spending should be a top priority. Use your stimulus check for groceries, gas and healthcare expenses. For more urgent purchases like replacing an appliance, inquire with retailers about financing options—many are offering 0% interest on their loans which can give you some time to ride out this outbreak with more cash in your pocket. For instance, Best Buy is waiving interest on major appliances for 18 months. You just have to pay it off in full to avoid paying interest within that time. For other household bills, do what you can to lower spending and stretch your budget — negotiate bills, shop around for better insurance rates, increase deductibles on insurance plans, tap into your local library to stream movies and TV shows for free through their digital platforms, or inquire about free video streaming services offered by your mobile carrier. Sprint offers customers a free Hulu subscription, for example, and Verizon offers one year of Disney + for free to their users. Lastly, you can get more out of your stimulus check by looking for coupons and using cash-back sites when buying everyday items. 

Refinance your mortgage.

With historically low mortgage rates in the marketplace, refinancing your mortgage can reduce your monthly payment while saving you thousands of dollars over the life of your loan. Your stimulus check could cover some of the potential fees that will be involved, like appraisal or title fees. Just make sure to compare rates among various lenders just like you would if you were shopping for any other major purchase. Rates can vary as much as one whole percentage point, which can make a big difference in what you end up paying. Don’t forget to ask about the fees you’ll be required to pay, such as any points or origination fees. 

Consider donating.

If you have sufficient savings and haven’t experienced any disruption income, consider donating a portion of your stimulus payment to help those who are truly suffering right now. There are many options such as donating to a local food bank, homeless shelter or the Red Cross. Even shopping for essentials through companies that give back is another way to continue helping your community and our nation during these tough times. For instance, sites like provide money-saving coupons and donate a portion of their earnings to charities across the country. Meanwhile, eBay is providing users with the opportunity to donate a portion of their sales to COVID-19 relief efforts and has pledged to match up to $1 million in donations.


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