Millions of Americans have received Economic Impact Payments outlined in the CARES Act of 2020. The IRS offers a breakdown of who’s eligible and the amounts they’ll be paid. By now, you and your partner should have received at least $1,200 each. There’s a lot you could do with this influx of funds after taking care of essential needs, but what are the best ways you can use the money? Keep reading for advice on savings, wedding planning, and other goals for your stimulus payments.
Build an Emergency Fund
CNBC’s Elizabeth Schultze reveals that most stimulus check recipients are spending the funds on food, gas, bills, and other essentials. They’re also paying back loans they’ve borrowed from friends and family during the COVID-19 crisis. That’s not surprising, given how hard the shutdowns across the country have impacted jobs, incomes, and the economy as a whole.
These are all sensible moves, but they’re also great reasons to start an emergency household fund. CNET’s Oscar Gonzalez suggests putting back about three to six months’ worth of income. If that’s not manageable, NerdWallet points out that having at least $500 saved can provide a bit of a cushion when unexpected expenses hit.
As an engaged couple, you may need a unique approach to building up your emergency fund. If you haven't already done so, consider setting up a joint savings account. You both may need to visit your local banking branch in person, but keep in mind that you can also create joint accounts with online-only banks such as Ally, Radius, and Chime. NerdWallet provides a list of online banks so you can compare options. As for funding this joint amount, you'll need to agree on a fair and equitable system. The Balance’s Miriam Caldwell discusses household budget contributions by income percentage, so you can use this approach when deciding how much each partner puts into the emergency fund.
Pay Down High-Interest Debt
High interest rates on credit cards, auto loans, and other debt can eat up any long-term financial gains you make. NerdWallet's advice for tax refunds can also apply to your stimulus check: Knocking out some of that debt can take the bite out of that higher-rate compounding interest. However, you should only consider doing this if you both still have regular income during the pandemic. If you’re out of work and struggling to make ends meet, focus on essentials like shelter and food first. Experian recommends reaching out to your creditors to explore COVID-19 forbearance and payment relief options.
What About Wedding Planning?
If you have household expenses well in hand and aren't facing a crisis, you may consider using part of your stimulus payments to fund your wedding. The Daily Beast reveals that some couples are already doing this, so you’re not alone. One bride expressed that paying local vendors would help revive her community's economy. That’s an admirable purpose, given the impacts the outbreak has had on world economies.
Writing for Brides, Jenn Sinrich and Anna Price Olson discuss the need to keep guests safe even after stay-at-home orders have been lifted. As you move forward with planning, talk about COVID-19 safety measures and contingency plans with your vendors. Also, continue to check for updates from trusted sources such as the CDC or your local healthcare organizations.
Make Smart Moves With Your Stimulus Money
Building your lives together as a couple entails using resources prudently. This requires a good balance between fulfilling needs, planning for the future, and indulging short-term desires. Those $1,200 stimulus checks are a major boon for many couples, so it pays to put those funds to good use. The habits you practice now can establish your financial future after you tie the knot.
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