1. Start an Emergency Fund
Financial experts love to advise you to keep three to six months of living expenses in an emergency fund. They don’t have much to say if two or three jobs barely cover your bills with nothing left to spare. Nor do they fill you in on how to rebuild if you drain the coffers when your clutch goes.
If you can cover your necessary expenses without your stimulus, use it to get a jump start on this valuable financial vehicle. It’s far cheaper than relying on high-interest credit cards when you get a flat tire.
2. Pay Down a Credit Card Bill
High-interest credit cards cost you thousands more over the life of the loan than what you spent. If you have the extra money, why not pay one down or eliminate it? If you have decent credit, consider doing a balance transfer first so that you pay less in interest overall.
Eliminating a monthly bill is almost like paying yourself twice. Each month, you can spend the extra on an elegant dinner or a new yoga mat instead of repaying a creditor.
3. Invest in a Mutual Fund
If you aren’t willing to dive into individual shares, why not let money experts help you out by investing in a mutual fund? This financial vehicle spreads a pool of money from many investors across various stocks, bonds and other investments. You can even find those that align with your values, such as those that invest only in green-certified businesses.
4. Start a 529 Savings Plan
If you have children or plan to, why not start a 529 savings plan? This vehicle lets you put money aside on a tax-free basis, which you can also withdraw without penalty when you use it for qualified educational expenses. Even if you later change your mind about having a house full of tiny feet, you can advance your learning.
5. Upgrade Your Assets
If you have a life insurance policy, can you prepay several months or invest your stimulus check to increase your balance? Your family will enjoy added peace of mind, and you can borrow against the principal if you need fast cash at a low rate down the line.
If you’re close to the edge and so is your car, can you get something better or pay for a necessary repair? Few people relish the idea of living in their vehicle, but with the threat of evictions looming, it’s wise to protect your assets. Landlords encounter financial hardships, too, and you can’t count on yours acting responsibly — only the difficulty you’ll face if you get a blemish on your record.
6. Look Into Land Co-ops
If you want nothing more than to own a home but find a lack of affordable housing an insurmountable barrier, consider investing in a land co-op. In these arrangements, owners pool their money to purchase a plot. They all work together toward the mutual improvement and upkeep of the property.
Many land cooperatives establish with a defined purpose, such as living more sustainably or helping the homeless by providing tiny homes. You could live a more purposeful existence and fulfill your dream of having at least part of a plot to call home — it beats rent when it comes to an ownership interest.
Spend Your Stimulus Check Wisely to Make Your Money Work for You
Consider yourself fortunate if you still have your stimulus check. Why not make it do more for you by spending it wisely on one of the items listed above?
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