Some of you might be getting a nice deposit from the Treasury department this week. From $1400 to an upwards of $6000, this deposit is long overdue. But before you rush to spend your #Stimmy (yes, that is what it's being called on social media), I want to you take some time to think about how best to use it.
1. Pay Off Past Due Bills - If you are past due on bills or other financial obligations, use the money to get current. You don't want bill collectors breathing down your neck. And don't forget that past due bills hurt your credit score.
2. Pay Down High Interest Debt - If you have a debt with an interest rate of 20% or more, pay off the debt or pay it down as much as possible. Minimum payments on high interest debt is an endless black hole.
3. Emergency Fund - If you haven't fully funded your emergency fund, parking your stimulus in your savings account will help prepare you for life unexpected hiccups.
4. Contribute to Your Retirement Plan - Because of COVID, many people stopped contributing to their retirement plans or took money out. Now would be a good time to make a contribution to your Roth IRA or restart contributions into your retirement plan.
5. Invest in Stocks or Cryptocurrencies - If you invested last year's stimulus check of $1200 into Apple when the market tanked, your $1200 investment would be worth $2500 today. If your stock of choice was Tesla, it would be worth almost $8000 today! And if you invested that same $1200 into Bitcoin, it would be valued today at....wait for it.....$10000!!! Yelp, that's not a typo.
"Do not save what is left after spending, but spend what is left after saving.” ~ Warren Buffet
So while others have plans to buy themselves something material or order the $300 steak, think long term and how one small decision can change your financial portfolio! Your future self will thank you.
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