Talk of the second stimulus payment is reported on daily. Americans have reached a point of desperation and many are relying on this payment to recover. With some having been out of work since March, the debts are piling up and unemployment isn’t enough for some people to cover their expenses. Should a second stimulus be given, what can you do to make the most of it? Let’s take a closer look at the second stimulus and your finances.
Use the Second Stimulus to Get Caught Up
If you’re behind on bills, the first thing you should do with your payment is catch up on bills. Should the stimulus not be enough to cover all the bills you’re behind on, pay them in order of priority. Obviously, your mortgage/rent, utilities, health insurance, and other vital expenses should be at the top of your list. Don’t let credit card companies, or anyone else, bully or shame you into paying them first. Having a roof over your head is essential. Do what you can with the money to best take care of your family. Just remember that you do need to contact your creditors and work out an arrangement that you can afford. Many companies are willing to work with you.
Pay Down Debt
If you’re caught up on your bills, use the money to pay down your debt. According to Debt.org, the average household carries more than $8000 in credit card debt. Sure, it’s tempting to use the stimulus money to buy a new TV or even go on a vacation. The real reward though is the feeling of paying off your debt. Pigly has so many awesome calculators, including one that will help you see how much you will save by paying off your debt. You will also see how to quickly pay off your debt. It’s important to have a plan so that you make the most of your money. There are different suggestions to paying off your debt. Is the snowball method or avalanche method best for you? Do your research to find out.
Get Ahead with Your Stimulus Payment
Last, but not least, my suggestion is that you get ahead with your second stimulus payment. If you’re in a spot where you’re financially comfortable and have no debt, use the money to get ahead on your bills. Personally, I like to pay my bills up to a year in advance.
Obviously, this isn’t possible with all bills, but you can do this with your cell phone (depending on which carrier you use), your electricity bill (by paying extra each month), heating costs (if you use fuel to heat your home), streaming services (such as Hulu and Amazon Music Unlimited), your car insurance, etc. Best of all, not only will you have the peace of mind knowing that these bills are taken care of, but you’ll also save money. Many companies are willing to lower the price of your service when you pay in advance. If you can’t pay a bill in advance, put the money into a savings account designated to bills and pull the money out as needed.
Now isn’t the time to play around. Yes, we could all use a bit of fun right now, but we need to be responsible. The second stimulus payment can help your finances, you just need to be smart about how you use it. Behind?, get caught up. Have debt? Pay it. In a good spot? Maintain it. You never know what’s around the corner. If the country has to close for a second time, during a second wave, you want to make sure you’re as prepared as you can be. Be smart and use the money wisely.
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