It pays to get the most out of that money.
- Several states issue rebate checks to residents due to excess funds in their budgets.
- Financial expert Dave Ramsey has some advice on how to use a stimulus check based on your financial situation.
- Use these excess funds to cover essential bills, support your emergency fund or invest in retirement.
It’s no secret that the cost of living is rising across the board and that families across the country are struggling to make ends meet. Many people exhausted theirs savings in the early days of the pandemic, when job losses were rampant. And now, in the absence of more money in the bank, many consumers are having a hard time keeping up with their bills.
The bad news is that there are no short-term plans to send a fourth round of federal stimulus check. The good news, however, is that some states are taking stimulus issues into their own hands.
A number of states have a surplus of funds in their budgets, and instead of keeping that money, they distribute it directly to the people. Maine, for example, has plans to send out $ 850 stimulus checks. Meanwhile, Indiana residents can expect a smaller, albeit helpful, $ 125 payment.
If you are receiving an incentive payment from your state, it is important to get the most out of this money. And financial expert Dave Ramsey has some important advice on how to use a stimulus check.
Good advice to take
Last March, lawmakers approved a third round of stimulus checks worth up to $ 1,400 apiece. In the wake of that, Dave Ramsey gave advice on how to use the money for good use. And so it is fair to apply that advice to all current stimulus programs that take place at the state level.
So what does Ramsey suggest? Well, it depends on your financial circumstances. If you are out of work or have lost income, Ramsey suggests using stimulants to cover essential things like housing, transportation, food, and utility bills.
On the other hand, if you are not out of work and your paycheck is stable, you should use your money to strengthen your finances by filling out your emergency fund and installments on unhealthy debt. And if you are ready in both respects, you can consider spending the money to save and invest for retirement.
Do not let the unexpected go to waste
It is not every day that a stimulus payment comes to you. You may be tempted to take your state stimulus check and use it to splurge with something fun. But before you do that, make sure your financial house is in order. If you have dived into your savings to cover rising living costs, your regular paycheck may not fully cover, you are better off rebuilding the funds you have taken out and waiting to pay out until your personal financial situation improved.
It is also worth noting that although living costs have risen right now, they may rise even more in the coming months. Gas actually tends to become more expensive in late spring and summer. So even you has not have dived into your savings to pay for significant things that could change in the short term.
Finally, inflation should decrease and the cost of living should fall to more moderate levels. But until that happens, it would certainly not hurt to build an extra savings pillow for yourself – even if you think you manage your current bills reasonably well.
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