How to Spend Your Trump Check
WHY YOU SHOULD CARE
Because saving it might not be the best option.
By Nick Fouriezos
The bill has been signed. The checks are being cut. And likely sometime in May, the majority of Americans will see a payout from Uncle Sam — roughly $1,200 for individuals making less than $75,000 a year, and $2,400 for married couples filing jointly and earning below $150,000 a year. Plus, $500 per child.
That’s not an insignificant chunk of change considering nearly half of Americans don’t have enough money to cover a $400 emergency, and that was before the coronavirus crash. But what should you do with that money? Here are some ways to spend your Trump check wisely.
Shore Up the Rainy Day Fund and Pay Off Essentials
Under the best of circumstances, most financial advisers suggest having three to six months of living expenses saved. And even if you haven’t already lost your job or income due to the mass closure of retailers and restaurants, a recession could still be on the horizon. “The most important first step should be to establish a budget based on expected income during the extended crisis period,” says Ray Martinez, co-founder and president of EverFi, a digital education company that offers free financial literacy courses online to K-12 schools across the country.
Some estimate it will be months and others predict it’ll be a full year before we can safely end social distancing and not see a resurgent coronavirus outbreak. If you don’t have a backup plan yet, open a high-yield savings account to get maximum returns and deposit your check — or pay off your mortgage, rent, utilities and other fixed costs ahead of time if possible. If you do lose your job, apply for unemployment benefits immediately: The $2 trillion stimulus bill includes an extra $600 a week in federal unemployment benefits for four months, in addition to state benefits.
Consider Buying Smart, and Local
Of course, if everybody saves then the mass influx of cash into the American economy will go … nowhere. So if you’re still drawing a salary and have basic needs covered, consider how spending your cash could help your neighbors. Many restaurants and mom-and-pop diners are offering takeout or delivery only, so ordering two or more times a week could make a difference in keeping them afloat during the coming months (for extra karma points, tip generously!). Board game boutiques, neighborhood bookshops and craft stores may still be willing to sell directly to you, even if there’s a Closed sign on the door, which could help them stay financially healthy and also keep you entertained while you’re stuck at home.
Having ways to distract yourself and your family can be a bulwark against despair.
Some will argue it’s frivolous to spend any of your check on entertainment. But in times like these, maintaining your mental health is crucial. We are potentially in for a long, demoralizing, global struggle. Having ways to distract yourself and your family can be a bulwark against despair. If you’re financially stressed, consider saving half and spending the other half. If it keeps you from breaking down and binging on a larger purchase later, controlled, targeted spending rather than strict austerity measures may actually save you more in the long run. If a gaming console, new guitar or pet lizard (seriously, one reader suggested this) will boost your morale for a few hundred dollars, go for it with no regrets. And whenever you can, purchase local: Small businesses don’t get the same kinds of bailouts that the big dogs do.
Prep Yourself Professionally
The savviest financial move you can make while social distancing is to keep your job. But even if you’re one of the lucky ones able to stay gainfully employed while working from home, new challenges await. So if a new pair of headphones will help you conduct better conference calls or keep you focused and productive while the kids are screaming, buy them (or better yet, request your employer to buy them for you). Home exercise equipment, such as a pullup bar or dumbbells, is an inexpensive way to stay fit, while a meditation app subscription may help calm your mind in moments of intense stress. And with the current situation likely to last for months, you won’t regret buying a more comfortable office chair or a desk that doesn’t force you to stoop over your laptop like Quasimodo.
If you’re bold, take this one step farther and start the side hustle you’ve always dreamed of. With the collapse of social calendars and daily commutes, many of us have more time on our hands. For a few hundred dollars, you can have a website built professionally or take high-quality courses on online moneymaking industries such as drop-shipping, blogging, user testing and freelancing. Making an extra $400 a month through your investment will pay dividends now and after the coronavirus is (hopefully) long in the rearview mirror.
Give It Away
The stimulus bill will be a hand up for many, but it wasn’t narrowly targeted. Many of us who remain employed and will receive checks may feel undeserving. If that’s the case, consider how your dollars can make a difference for those in need. Charities have reported a steep decline in donations — do your research, pick one that has a track record of handling its money responsibly and enjoy that do-gooder high (plus you’ll be able to write the donation off next year, since stimulus checks are taxed as regular income).
Gifting friends or family who have lost their jobs is an obvious option. Some laid-off musicians and service industry workers have set up online “tip jars,” and helping them is one way to aid some of those who have been affected the most. And with schools shuttered across the country, keep in mind programs that offer free food for children, such as No Kid Hungry and Feeding America. As we face an age of deep anxiety, there’s no point in skimping on efforts to keep our humanity.