6 Smart Ways to Spend Your Next Check From Uncle Sam

Man holding his second stimulus payment
Photo by Khosro / Shutterstock.com

The federal government likely will send you another check before long. Both chambers of Congress have drafted or passed new coronavirus relief bills that authorize a second round of stimulus payments.

So, provided that the Senate and House of Representatives can agree on a final bill to be signed into law, the chances are good that it will call for Uncle Sam to send more stimulus checks to taxpayers.

While you wait for your money, following is a slew of smart options for what you can do with the check once it finally arrives.

1. Use it to live

Hopefully, this is obvious: If you need the money now — to pay rent or utilities, or simply to buy groceries — take what the government gives you and spend it.

Perhaps there are ways to avoid this option. Ever since the pandemic made its unwelcome appearance, many banks have expressed a willingness to work out plans that give customers a little financial breathing room with their bills.

So, if you can work out something like this with lenders, it might be worth doing. That way, you can keep the government cash in savings in case you need it later.

But if you need to spend the check right now, do so.

2. Put it into an emergency fund

You would be hard-pressed to find an event that better defines “emergency” than the spread of COVID-19, the disease caused by the coronavirus. If you already have an emergency fund — or simply want to start one now — putting your government check into such a “rainy day” account might be a wise move.

It’s true that we are in the midst of a “rainy day” right now, but it still can make sense to add to the emergency fund in case things get worse.

Wondering where to store that money? Check out “The 3 Safest Places to Keep Your Emergency Cash.” Or, go directly to our Solutions Center and find a savings account with a great rate.

3. Pay down debt

Whenever possible — even in good times — you want to avoid carrying debt. But debt is especially dangerous when times turn tough.

So, if you already have a fat emergency fund and feel comfortable that you can use it to ride out a lengthy downturn, consider using the money you get from the government to pay down credit card debt. Or, you can even make an extra payment on your mortgage or auto loan.

Just remember that staying flexible is key during tough times. If you don’t have a lot of savings already, it might make more sense to skip paying down debt with that government cash and to put the money in an emergency fund until the crisis has passed.

And if you are deeply in debt, stop by Money Talks News’ Solutions Center and search for free expert debt help.

4. Put it toward refinancing costs

Homeowners may be better off using their check to help cover mortgage refinancing costs rather than to make an additional mortgage payment.

Mortgage rates are hovering near historic lows. The average interest rate for a 30-year fixed-rate mortgage was 2.99% as of July 30, down from 3.75% one year prior. The average rate for a 15-year fixed-rate loan fell from 3.2% to 2.54% during the same period.

So, many homeowners stand to save a lot of money by refinancing their mortgage at a lower rate. That assumes that their savings would outweigh the cost enough to make refinancing worthwhile, but that is more likely if Uncle Sam’s check is helping cover those costs.

To find out what rates you could qualify for, check out Money Talks News’ mortgage refinancing rate search tool.

5. Blow it on fun stuff

Spending what is supposed to be an emergency check on something fun sounds like a stupid idea. And for millions of people, it clearly would be a boneheaded move.

But again, if you already have money to burn and want to spend a little on something nonessential to take your mind off troubled times, be our guest. In fact, the government probably would see you as a team player, since spending that money will help keep the economy afloat as it sails through very rough seas.

6. Donate it

Finally, these are sad, scary days. But we’ve seen worse: from the Civil War to the Great Depression and two world wars.

We don’t need to recite the litany of other historical challenges America has overcome, many of which were on par with the difficult moment we face now. It is our ability to unite and to help our neighbors that has gotten us through countless crises before, and that will do so again this time.

So, if you don’t need the money, give it to a good cause. Consider the donation your contribution as a foot soldier to the wider war effort. When we finally lay this pandemic to rest, you’ll feel good having done your part to help.

Looking for a great charity? Check out “21 Top-Rated Charities Fighting the Coronavirus.”

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Secrets to Keeping Your Brain Sharp as You Age
5 Secrets to Keeping Your Brain Sharp as You Age

Forget young at heart — science says these tricks will keep you young in mind.

33 Home Upgrades That Cost Less Than $100
33 Home Upgrades That Cost Less Than $100

A little money goes a long way with these imaginative projects. You can do most of them yourself.

10 Bad Money Habits That Are Robbing You Blind
10 Bad Money Habits That Are Robbing You Blind

Here’s how to change those bad behaviors.

How to Achieve Your Financial Goals in 2020
How to Achieve Your Financial Goals in 2020

New year, new you. Get your finances on track with the help of these tools for investing, saving, budgeting and earning.

8 Ways to Slash Your Internet Bill
8 Ways to Slash Your Internet Bill

No matter what price you are paying for internet service, taking these simple steps can lower it.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

10 Things You Should Never Do With Bleach
10 Things You Should Never Do With Bleach

Does the pandemic have you reaching for bleach more than ever before? Learn the ins and outs of using this powerful disinfectant.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.