Economic Impact Payments are being sent to millions of Americans to help during this economic and health crisis. Over 2 million people in Missouri and 4.8 million in Illinois will receive an Economic Impact Payment.
But you may be wondering: what should you do when you get your payment? The answer will be different for everyone. To help you make decisions that will support you now, and in the future, here are 6 ways you can use this payment.
1. Pay critical expenses
Buy food and medicine, and pay rent or a mortgage first. It is important to take care of these essential parts of life before other financial commitments. If you are having trouble paying all of your bills, it is important to contact your creditors, mortgage company or landlord to let them know what is going on. You may be eligible for a temporary pause in payments or a forbearance.
We’re seeing increased calls through United Way 2-1-1 from community members needing help with basic needs, like food, rent and utilities. In the last 90 days, our 24/7 helpline, has received over 7,000 calls for help with rental assistance, and through our COVID-19 Response, we’re funding local nonprofits, like the St. Louis Area Foodbank, that provide these critical needs right now. So, if you’re not in a position to pay for critical expenses, we’re here to help.
2. Pay your taxes
The IRS extended the tax filing deadline to July 15. If you have not paid your taxes, you could use your stimulus money to cover part or all of your payment. Need to file your taxes? United Way offers every household with a simple return the opportunity to file their taxes for free through MyFreeTaxes.
3. Pay down your debt
Did you know average household credit card debt is over $8,000? Making a significant payment on a credit card or loan that has an outstanding balance will help reduce the interest paid on the account, allowing you to keep more of your money in the future.
Debbie Irwin, United Way of Greater St. Louis’ Community Economic Development Director, works closely with our financial programs, like the ASSET financial education and savings program, to help people become financially stable. She recommends using PowerPay.org to help decide which credit cards to pay down first.
4. Start or add to an emergency fund
A single, unexpected event – like losing a job due to COVID-19 impacts – can cause a financial crisis. Knowing how to create a financial safety net can help you prepare for the unexpected in the future.
Most experts recommend having enough money in your emergency fund to cover three to six months of expenses. Your stimulus money can be a starting point or a way to boost what you are already doing.
5. Support causes or local businesses
Using your stimulus money to purchase items from local stores, many of which are offering gift cards or no-contact sales and pick-up, can help ensure small businesses are able to fully open down the road.
Additionally, individuals and families continue to face challenges such as wage loss, rent assistance, and not having enough food. Local nonprofits are working around the clock to help our neighbors and communities in need. Our United to Help Our Neighbors program will help provide resources to those who have had income loss due to COVID-19.
6. Make long-term investments
One final way to make the most out of stimulus money is to invest it. If you have children, opening a 529 plan to save for their college education can be a sound investment. Opening or contributing to an individual retirement account (IRA) or other retirement accounts are also good options.
United Way of Greater St. Louis is here for our community during this time. Whether it’s help getting connected to financial resources or basic needs, United Way 2-1-1, our 24/7 helpline, is here to connect you to resources in your area. Dial 2-1-1 (1.800.427.4626) or visit 211helps.org to get connected to resources in your area.
United Way of Greater St. Louis does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before making financial decisions.
TAKE ACTION NOW:
• If you have not received your payment yet, use the IRS Get My Payment resource to find out when you can expect your payment to arrive.
• Share this post with family and friends on social media! “Did you get your Economic Impact Payment? 6 ways you can use it wisely.”