3 Ways to Spend Your Coronavirus Check Wisely

It's almost here! The coronavirus stimulus check that families will be getting won't help with all of their costs. But for millions of Americans, their portion of the $2.2 trillion recovery package recently passed by Congress is a key first step. However much your coronavirus check ends up being (whether it's several hundred or several thousand dollars), let's be honest: for most us, it will be a challenge not to spend that money right away. It's far too easy to spend our check on things that later we'll look back on and say, "I shouldn't have done that!" In many cases, we might waste our stimulus check on things that jumped in front of our genuine needs. It's so important that we use those funds wisely!

So, once you receive your check, how can you keep that first step from being the wrong step?

Why It's Going to Be So Easy to Blow Your Check

First, let's try to understand why it's so easy for people to blow every cent of their coronavirus stimulus check.

There have been numerous studies conducted on the psychology behind people's behavior when an unexpected check or windfall shows up. For example, it's almost guaranteed that on the day you receive your check, your favorite Instagram influencer is going to highlight a post that claims they've "never seen a discount like this before!" Posts like that can absolutely shatter your resolve. When you go to the website or online store just to check it out, often you will see a banner or video claiming, "Only two left!"

And that's when something inside you screams, "I'm going to miss out!"

This fear-based reaction is often called the scarcity principle. It's a powerful trigger that you've already witnessed in so many people as they stockpile toilet paper and bottled water. These people have seen the lines and the empty shelves. Even if they have enough supplies to last for months, when that "only one pack per person" sign goes up, they will continue to buy.

With millions of checks going out all at once, be ready for a herd mentality reaction like never seen before. With all the pent-up energy from being locked inside and online sales, when the checks hit our bank accounts the herd will start stampeding, saying, "I've got to spend it here!"

But that does not have to be you. Make a choice right now to be part of the wise group of individuals who decide not to blow their check. But for that to happen, there are 3 things you must do to keep from being swept away by the "I'm blowing my whole coronavirus stimulus check today" herd!

3 Things We Must Do to Wisely Spend Our Check

1. Wait 24 Hours

Make a commitment right now to not spend one cent of your check for at least 24 hours after it hits your bank account or mailbox. This all starts with being accountable. Talk it over with your spouse. If you're single, call a close friend and make that commitment. When the herd stampedes past, you'll be incredibly grateful for the commitment you made.

Experts call this 24-hour waiting period a buffer zone. You'll be in the wisest 10% of people on the planet, or at least our country, if you make the decision now to commit to a 24-hour buffer zone before you cash your check. The one exception is if you are in need of food for your table or medicine for your health. But in reality, creating that buffer zone won't happen unless you have a plan. People who fail to plan often plan to fail.

2. Create a Financial Plan

Starting today – before your check comes – take some time to build out your financial plan.

Don't waste this crisis. Use it to take control of your life. The best place to start is by making a list of what you have and what you need. What you have is called your net worth. What you need is your budget. A budget is simply a financial plan for your future. If you don't have a budget, click here to build one that will get you through the next several months.

Your budget can be broken down into two simple things that you can control: what you spend and what you earn.

What You Spend:

Do you have a 3-6 month emergency fund? What if you were to lose your source of income tomorrow? You need to have food. And you need to have shelter. It's critical to think about the things you need before the things you want. Most people spend about half their income on needs and the other half on wants. You can stretch your budget a long way if you focus on needs.

What You Earn:

If funds are tight or you have recently lost your job due to the coronavirus crisis, drop your pride and get ready for the future by exploring all possible revenue sources. Welcome to what is called a gig economy. What "gigs" can you pick up to minimize the damage you've taken from to your temporary loss job? Don't tell yourself, "I'm too good for this!" You aren't looking for a permanent job or a new career (though you might get lucky and find one). Right now, you are looking for a way to stretch that stimulus check as far into the future as you can.

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3. Prioritize Savings and Generosity

Make a positive statement that you're not afraid of the future by doing two small things with your check. First, save something for you and your family. Then, be generous to another person or establishment.

Even if it's a small amount, $25 for instance, put it into your savings account. This is one way to declare that you're not going to be pushed around by emotion, but will be guided by wisdom.

Take another $25 (or more) and put it towards helping someone else. Your church is probably hurting right now. Maybe you have a friend at home with a newborn and you can pay to have dinner delivered to them. Or you could use that $25 to fill up a sack with canned food for a local food bank. Use some part of this stimulus check towards helping others who are struggling. You can't meet every need, you can look for that one small, but important, thing you can do to make a difference in your future and someone else's future as well.

© 2020 by Focus on the Family. All rights reserved. 

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