As you eagerly wait for your check to get dropped into your bank account, you should be thinking about what you are going to do with your money. Obviously, if you need to spend the stimulus check on necessities, that takes priority. The point of the stimulus check is to keep people afloat as we ride out the rest of the pandemic. If you are lucky enough to have any sort of financial flexibility on top of your government stimulus check, here’s how you can maximize your returns.
1. Invest it.
I am by no means a stock market wizard. In fact, I know very little about the market. However, there are several resources for you to get educated about the market. I am not saying to gamble away your money on volatile stocks. I am saying that there are a few accessible ways to make the most of your $600 using stocks.
For example, use the app Acorns. If you deposit the money into Acorns, they will invest it for you in conservative or aggressive stocks. I began doing this right before the pandemic. Since then, I have made 23% more money than what I originally deposited in less than a year. You also can use apps such as Robinhood to buy low-risk stocks such as Coca-Cola or Abbott. These stocks are safe, hardly ever suffer a steep drop and are good if you are trying to store your money long-term.
2. Use it as a down payment.
It is not often that we get a lump sum of money dropped into our bank account. If you are looking to buy a car or a house, the stimulus check can help you get a leg up on your down payment. After you make this upfront payment, depending on your interest rate, you should be able to make monthly payments on the rest of the loan or mortgage. Do not use the money to buy something beyond your price range. I am simply saying that you can use this money to jump ahead in your savings goals.
3. Target a loan.
If you’re like me, you have several small loans through one company or a federal loaning service. Mine is for paying off my college loans. If this is the case, you can do something called snowballing one loan, which is where you put a larger amount of money on one loan and make the minimum payments on others. This will shrink the life of one of your loans quicker and lower your monthly payments long-term. If you are done paying student loans earlier in life, then that’s less interest you have to pay off in the future, therefore saving you money in the end.