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Personal Finance FAQ

What to do With Your COVID-19 Economic Stimulus Check

This article is part of a series on personal finance during the coronavirus pandemic. Please check out the Coronavirus and Your Finances Series (link will open in a new window).

Americans need to get cash now and the president wants to get cash now, and I mean now— in the next two weeks.
–Steve Mnuchin

In response to the COVID-19 pandemic and its subsequent economic impacts, the U.S. government has pushed for stimulus checks to be sent to U.S. citizens based on household income.

Let’s assume that you’re in a family that is in line to get a stimulus check. Furthermore, let’s assume that, for a means-tested family of 4, you’re going to get a check for $3,400 – $1,200 per adult and $500 per child.

What should you do with your economic stimulus check?

If you are a worker at risk of a layoff or of not having an employer in a few months:

Put that money in a safe, liquid, accessible place, like a money market (which Treasury has asked Congress for permission to backstop). Full stop. Do not pass go. Do not invest it!

Your first priority is making sure your family has enough food.

Then, you need to make sure your shelter is paid for.

Everything else is optional. If you need transportation for work and you have a loan or a lease, pay that.

For food, buy unprocessed meats and fresh fruits and vegetables. They are cheaper. Cook at home. Don’t buy bottled water or preprocessed foods. You’re trying to boil your expenses down as much possible (no pun intended), to give yourself as much runway as possible.

Look for any other income earning opportunities. Drive for Uber (#aff). Amazon is hiring, so perhaps work another shift. See if your local grocery store needs stockers or warehouse help.

You need to be prepared to be in survival mode for 3 months (if you believe Goldman Sachs) to up to 18 months (if you believe the UK’s COVID-19 research team).

Which leads us to our second category…

If you are not in danger of losing your job (you think), but do not have a 6 month emergency fund

Put it in the emergency fund. Think about ways to cut down on expenses. You may not need to go full bore like above, but if the economy is crushed for 18 months due to massive quarantines, you want to buy as much time as you can.

If you have a (reasonably safe) job and your six month emergency fund is fully funded

I’d STILL put that money in liquid assets. We have 18 months’ worth of expenses in liquid assets without adjusting our lifestyle, and we’re still dialing down spending and will sock away any checks we receive in a money market account. Investing $1,200 or $2,400 or even $3,400 in the markets won’t materially affect our outcomes, but if we’re on the long timeline end of the scenarios in terms of economic impact, I’d prefer not to have to draw down other assets in an economic crisis.

If you’re way, way, way in the clear in terms of your funding

  1. Coordinate with your local ER.
  2. Order food from a local restaurant that could use your help.
  3. Deliver the food (or have it delivered) to that ER.

Some emergency rooms are getting slammed.

Many others are about to get slammed.

They’re at the front lines of the COVID-19 outbreak, and they may not have enough personal protective equipment. Do them and your local eating establishments a solid and help them out. My wife and I have already done a food run to our local ER and will continue to do so.

Our friends Ali and Alison at All Options Considered have another great idea for what to do with your government stimulus check if you do not need it.

For everyone, don’t panic. Don’t hoard toilet paper. Don’t go buy a bunch of guns (good luck shooting a virus). Stay safe. I’m no epidemiologist, but defectors from isolation (until we can properly isolate the infected through proper testing and hospitalization and quarantine) will just extend the pain for everyone.

What are you going to do with your stimulus check if you get one? Let’s talk about it in the comments below.

By Jason Hull, CFP®

Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

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