top of page

Guide to Spending Your Stimulus Check

6 smart ways to spend your stimulus check to save money and spend wisely



Stimulus check


*Poof* your stimulus check just arrived in the mail and you are now 1,400 dollars richer (or maybe more depending on your marital/family status). Ca-ching! 🤑


Now what?


We often talk about where that next dollar should go. When you consider your budget, that’s all it really is, right? Just like we help you create your budget, we’ll help you determine how to plan for your stimulus check cash. With every dollar that comes into your bank account, we’ll help you figure out how to spend it, and how quickly.



Check off living expenses first


If you’re facing financial hardships—can’t make rent, eating ramen for more meals than you’d like, can’t afford child care— you should prioritize using this money to pay for your immediate expenses such as food, utility bills or childcare. After all, that’s what this money is supposed to help you with!


Especially if you’re in a financial rut, your stimulus check may not seem like a lot of money. But, it’s there to help you get back on your feet. While this check can’t repair the economic damage of 2020, it can give you time to catch your breath and save up for future bill payments.



Keep that budget in check


Whether you’re struggling to make rent or feel secure in your living expenses, it’s always a good idea to reassess your budget. Especially when facing a financial crisis, you might want to consider trimming down your budget.


First step to fixing your budget? Separate your wants from your needs. Do you have a gym membership you can cancel? Is there a cheaper cable package you can switch to? These are some of the expenses you could consider either swapping out for a less expensive version, or cutting altogether. We’re not here to tell you what you should spend your money on. Instead, we’re here to help you determine what you want (and need) to spend your money on.



Pay off that debt with your stimulus cash!


If living expenses (food, shelter, child care) are taken care of, next up is tackling your debt. Paying off debt while cash is tight isn’t easy, but it’s doable.


When creating your debt elimination plan, consider tackling your debt with the highest interest first. Making a big down payment will lower your interest rate, saving you money down the line. That way, you’re paying more toward your principal (the amount you actually borrowed), instead of interest. Just triple-check that your lender doesn’t have any early payment fees or rules that could end up biting you in the tushy.


If you’re still super strapped for cash and struggling to make ends meet, remember some lenders may allow you to delay your payments. Some will have better forgiveness offerings than others, so do your homework first. And, don’t be afraid to call your lender and explain your situation. You might be surprised how helpful they’ll be.



Stash some cash in your emergency fund


If the coronavirus taught us anything about finance it is that an emergency cash reserve is always a good idea. Lost your job or got a significant pay cut? Your cash reserve is there to help you get by until you get back on your feet.


If you don’t have anything set aside yet, it’s not too late! Open up an account and aim to save up at least two months of living expenses in this fund. This way, if a life emergency rolls around, you will have savings to help you tread water.


We recommend opening a high-yielding savings account for this reserve if you haven’t already. Larger interest rate = more savings.


If you can cover your bills with unemployment benefits, don’t just spend that cash on HBO streaming and takeout! Moving your stimulus check funds into a high-yielding savings account—or just any savings account—may also be a wise play to help you save more cash for any future issues. We’re always fans of saving for the future.



Put your stimulus cash to work in the market


Let’s talk about retirement, baby! Are you feeling good about your debt payments? Do you have enough saved up in your emergency fund? If yes to both, then think about using your stimulus check towards your future.


You might be wondering how much to save for retirement. And we can help—pop into the Pocketnest app and play with our retirement savings calculator.


When it comes to investing in your future and creating retirement savings plans, you have lots of options. You can put the money into your IRA account (or open a new account if you don’t already have one) and start saving for retirement. There are two main types of IRA accounts: traditional or Roth. The main difference between them is that Traditional IRA contributions are tax-deductible; but, after retirement, you have to pay taxes for withdrawals. On the other hand, Roth IRA contributions are not tax-deductible; but, after retirement, you can make withdrawals tax-free. Both have their pros and cons. Figure out which investment plan is right for you and get started!



Save for your kids’ college


If you have kids, you may want to consider putting some of your stimulus check money into a 529 plan to save toward your kids’ college tuition. The COVID-19 relief package provides additional money for each child. Think about putting this money into a 529 plan to start growing your earnings. You will thank yourself down the line (and so will your kids!).



Share the wealth!


If you are in a good place financially and feel like showing your gratitude, why not donate your money to those in need? There are so many charities that are currently struggling with finances both nationally and globally. Do your research and find one that aligns with your values to support. You can also reach out to a local food pantry or homeless shelter and buy them some goods and supplies. Giving back does not stop there. If you have a family member or friend that was hit hard by the pandemic, you may prefer to give the money from your check directly to them. Sometimes, the greatest gift is to give.



Make home improvements


Provided your other critical needs are met—living expenses, high interest debt paid off, retirement savings in place—your stimulus check could be a great way to start that renovation you have been dreaming about since before the start of the pandemic. Yep, we’re talking about those faded yellow shutters.


Not to say that new shutters are the first place to spend your stimulus money! Instead, we recommend using this cash as a way to kickstart a smart home renovation to—potentially—increase the value of your home. Just make sure you stay within budget. While your stimulus check might not cover the whole cost of your renovation, every dollar counts, and $1,400 is not a bad place to start!



Treat yo’ self!


It’s important to remember to give back to yourself every now and then. So if you want to spend some of your check on dinner with friends or a deep tissue massage, go for it! And hey, the government made these stimulus checks to increase consumerism. So don’t be afraid to take yourself on a little shopping spree if you are in the financial position to do so. Technically you’re doing the economy a favor… It's been a tough year, you deserve it! Remember you should still be smart while splurging. Don’t overdo it! And as always try and support small local businesses when you can.




Before you decide where your next dollar should go, be sure to consider your current life situation. Yes, you can use some of your stimulus check to treat yourself; but, the reality is that most of us receiving these stimulus checks need to use them for immediate expenses or to better our finances.


We can help you spend your stimulus check wisely and put it to good use to go a looonnngg way. So take your time and think about all your options. You got this!


Download Pocketnest and get your finances in order—in just 3 minutes a week! No jargony finance-speak, pricey fees or in-person meetings required.








bottom of page