Ready to blow your stimulus check? Don’t! Here are 7 ways to consider using it instead.
So, we are on the cusp of getting another stimulus check. The interesting thing about this time is that we are also in tax season. Year after year some of us use our refund check to go on vacation, update our wardrobe, get a new iPhone, buy a PlayStation, get a new purse, and the list goes on. Now, granted, some of us will use our stimulus money for groceries to feed our families or pay down credit card debt. However, let’s be real, most will be looking to possibly blow $1,000 plus on whatever shiny object tickles our fancy at the time. Here are some ways we can use the $1,000 wisely instead of blowing it.
1. Pay down credit card debt
One option is pay down your credit card debt. The current APR is generating tons of money for the credit card companies. The goal is to continue to pay down the card(s) until the balances become more manageable. With credit card debt gone it will allow you to have money in your pocket that can be used to invest, save, and grow. Think about it. How much do you spend paying the minimum amount on your credit card bill. Depending on your balance, this could be $75-$100. Now, if you have more than one credit card, this can add up to hundreds of dollars. So, if you used the stimulus money to pay down your credit card balances, that means you should be paying less of a minimum payment which equals more money in your pocket. Genius right?…I know!
2. Invest in an Index Fund
Be sure to reach out to a certified investor to get more information on this option. Taking $1,000 and putting it into an Index fund that gives an extra 8% every year on your investment is a great way to compound your money. Now it’s not just the $1,000 that you should invest but you should contribute monthly or quarterly to the fund to increase the amount periodically to create a nest egg. That nest egg will grow overtime and will grow to a fund that you can use to retire in the future. I wish I started this when I was 20 instead of wasting the money on things that I no longer have now.
3. Start a stock portfolio for your child
If I had one regret it would be not buying stocks back in 2009 when the bull market started. Now there has been some chatter about a potential crash in the market. With yields fluctuating it’s giving investors jitters and we have seen more red days (decrease in stock value) in the stock market than normal when stocks have been on the rise for the last 10 consecutive years. I am not a certified investor, but if you would like to start a stock portfolio, I would reach out to a certified investor to help you set up an account to possibly create passive income for your child.
4. Start a college/business fund for your child
Most people may not consider this option because they may think that $1,000 is not a lot of money, especially considering the current cost of education or the associated start-up costs for a business. Well, that might be the case if you are only putting $1,000 in and leaving it at that. The goal is to add money to the college/business fund every month and grow the account so that your child won’t have to take out student loans and have a hard time paying them back with interest. Think of the $1,000 as a jump start on a college fund or business investment that your child is the beneficiary of. Please speak with a certified consultant/advisor f you are not sure how to get started.
5. Start that business you’ve been talking about
If you’ve found your passion and want to take your side hustle to the next level an extra $1,000 can help you with starting or expanding your business. Remember there is a right way and a wrong way to set up a business. Please reach out to a certified advisor/consultant to help you with things you are not sure about. It’s better to do things the right way the first time.
6. Get your car tuned up
Gas prices are about to go up. So, if you are not working from home and have to report to the office, it might be a great idea to make sure your car gets a tune-up. A car breaking down in addition to gas being $15-35 dollars more to fill up your tank can hit your account pretty hard. Especially if you’re filling up every other week. Making sure your car is in great condition, will give you peace of mind when the price of gas increases to higher than normal prices. If you are working from home and don’t have to drive as much, putting the money in an emergency fund is also a great option.
7. Give the $1000 to someone who is struggling
I know this may come as a surprise to some, but if your finances are in order and your family is secured. Donate the $1,000 to a family in need. We have different networks that we can access to find families that are in need. We can ask our pastor, coworkers or even family and friends for suggestions. Some family were hit very hard during the pandemic and $1,000 can go a long way for them.
Thank you for reading my post. I hope this post can help us be wiser in spending the stimulus check that we might receive. Many have posted on their social media that they will take the stimulus check and go on vacation. Some have said that they will buy some new clothes and a bigger TV. However, I believe that sometimes we have to try to take “free” money and turn it into a stream of income if we can. If not for us, then for children. Too often nothing is passed down or was built specifically for our future generations in communities of color. However, we can change that narrative and make different decisions moving forward. Those decisions can help improve finances and be a lesson to the next generation. What are some other things that we can do with a stimulus check besides blow it? Please feel free to share below. If this post can be helpful to someone please feel free to share and if you are new to Millennial Oaks, please subscribe 😊.