The top five areas you should be prioritizing for your financial wellness.
The coronavirus (COVID-19) pandemic has had a financial impact on millions of Americans. Thankfully, some additional relief is on the way. Lawmakers recently passed another stimulus package to combat the economic impact of COVID-19. If you are expecting a stimulus check, you may be unsure how to best use the money you receive. This will depend on your unique situation. But in general, here are five areas to prioritize:
1. Start with the essentials
Prioritize your essentials (the stuff you can’t live without) first: things like medication, food, utilities, and housing. Taking care of your immediate needs so you can stay healthy is crucial! Once you’ve taken care of yourself and your family’s immediate needs, you can look at other areas to allocate the money.
2. Emergency Savings
Consider putting at least part of the money toward emergency savings, whether it’s an existing emergency fund or one you’re starting from scratch. Setting aside as much as you can and knowing it’s available if you need it can provide you with peace of mind. You don’t have to think of this as money you won’t touch ever: think of this as an emergency fund to help for next month’s immediate needs and expenses.
3. Housing Costs
Next, you should look at housing costs like rent payments or your mortgage. While many states and lenders are taking steps to provide support for homeowners and renters, including suspending evictions and foreclosures, and deferring payments, if you can afford to make these payments you should. They will eventually come due, and staying current will be much less stressful than falling behind. You should also reach out to your lender or landlord directly for the most accurate, up-to-date information on programs available if you cannot make your full payments. If you feel stressed about calling your lender or landlord, please reach out to our partners at GreenPath. Their financial counselors are here for you and can help you navigate this conversation.
4. Auto Loans & Lease Payments
Similarly, you also want to try to keep up on your auto loan or lease if you can. If you have fallen behind, consider using the stimulus money to catch up on late payments. Many auto lenders are offering payment or debt relief options, such as deferred payments or waived late fees. Most lenders don’t want to see you default on your loan or face repossession, so be sure to stay in contact with them and keep them up to date on your situation.
5. Credit Cards and Unsecured Loans
Lastly, put money towards your unsecured debt payments like credit cards. Lenders and the government are working to provide support for these debts as well. Keep in mind that interest will likely continue to add up on these debts. If you’ve made your minimum payments, set aside money for an emergency fund, and have handled your housing and auto loans, you may want to consider putting some of the money towards paying down the principal on your unsecured debts. The more you pay off now, the more you will save in overall interest.
Once you’ve made a plan, you might consider having a buddy — a friend, family member, someone you trust — look it over. This may give you more confidence that you are making the right decisions for your situation. We are here for you and we are here to help connect you with the resources that you need.
Take other proactive steps that can help you get quicker access to your funds once you receive your payment with Members Choice.
- Watch out for stimulus payment-related scams.
- Check your payment status or update your information on the IRS payment portal (available mid-April).
- Download the Members Choice Mobile App
This is the quick way to check recent transactions on your account or make deposits. Or use the app to transfer funds to save your stimulus payment to your savings account.
- Deposit from Home with Mobile Check Deposit
With our increased deposit limits, if you receive a physical check you can quickly deposit without visiting a branch.