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If you are American, you will most likely be receiving a $1,200 stimulus check in just a few weeks. For some, you might receive less or nothing at all, it just depends on how much income you reported on your last tax return (2018 or 2019).

*Note: If you live in another country your government may be offering a stimulus package as well, the same concepts apply.


Regardless of how much you receive, I wanted to share a few ideas on how you can spend your money in a way that gives you the most benefit depending on your situation. 


First off, I just wanted to give you a word of confidence. There’s no doubt many of you are struggling out there, but don’t give up hope. The world is resilient and we will overcome this situation, we just have to do the best we can given the circumstances.


1. Spend On Necessities (food, water, shelter)

I hope this goes without say but health and safety are absolutely essential and must not be taken lightly. Make sure your family and yourself are fed and have a roof to sleep under. $1,200 can really go a long way in terms of food and rent payments. 


Tip 1: When purchasing food, take the time to find food deals and prepare cheap but healthy meals. You don’t need to purchase the most expensive brands, just buy what you need to survive. When this economic downturn is all over you will probably learn a thing or two about saving when it comes to grocery shopping and can spend more on other things. You will also learn some pro cooking skills!


Tip 2: Purchase a water filter rather than bottled water. You can save a ton of money in the long run if you utilize a water filter such as a Brita. You save money and the environment by not having to use so much plastic.


Tip 3: Take advantage of rent credits. Some apartments are offering rent payment extensions or discounts if you pay rent on time. The apartment I rent is offering a $50 credit next month if I pay this month on-time which is essentially free money for doing something I would do anyways. 


2. Pay Your Bills

Ensure your debts are all paid up because you don’t want that looming over your head. While many companies understand the current situation and offer some sort of relief, not all companies do. Some companies still expect you to pay bills on-time just as you normally would. The last thing you need is a late payment penalty because you assume you have been given an extension. 


3. Build Your Emergency Fund

Start building your emergency fund for unexpected events. It never hurts to have some extra cash on hand in case you would need it tomorrow. You should always ask yourself the question: “If I need money tomorrow, can I get it and how much can I get?” A good strategy is to save up 3-6 months of expenses in a bank account so you can survive and adjust in that time. The first milestone is getting $1,000 and this stimulus check is giving many people the opportunity to start saving.


Tip: Open a high-yield savings account such as Ally Bank. There are banks which will pay much higher savings interest rates than most banks. Ally Bank for example, currently pays an annual interest rate of 1.50% which is much higher than the average rate of 0.09%. Do you want more money or less money? If you want more, open a high-yield savings account.


4. Invest In Yourself

There is no better time to pick up a new skill that can increase our value than right now. Being stuck at home means we spend less time preparing and commuting to work. Take this time to learn new skills such as coding, marketing, or personal investing that can really increase your value in the long run. You can read books, learn from YouTube, or take a paid online course. 


Tip: Have a growth mindset. Think about ways you can grow every single day to improve your life. Don’t think of being stuck at home as a constant, think of it as a way to continually learn and grow. 


5. Invest In The Stock Market

Although there is very high volatility in the market right now, stocks are much cheaper now than they were before meaning you can get some really good deals. If you can continue to stomach the ups and downs without letting emotions take over, this $1,200 can be a nice chunk of change to invest in your portfolio.


Tip: Don’t day trade. Seriously. 99% of people lose when they day trade, just take that advice as I don’t have time to get fully into it. I suggest investing in low cost index funds such as Vanguard VTI or something similar. This way you are diversifying your portfolio by owning many different stocks. My personal choice of investing platform is M1 Finance but some other good ones are Betterment, Webull, Robinhood, and Vanguard. 



Focus on what you need first and continue to work down the line. Don’t spend your stimulus check on a new tattoo, drugs, alcohol, or something else you don’t need. Be wise because times are tough for everybody. You can use this money to seriously keep you safe and improve your life. 


Lastly, take Andy Dufresne’s advice from Shawshank Redemption and have hope. The world rebounded from recessions before and it will happen again this time. Just do what you can and make the best out of the situation. Stay healthy, safe, and positive out there.

Jacob Pippenger

Author Jacob Pippenger

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