The economy has been ground to a halt because of COVID-19. With the goal being to limit the spread of the virus, keeping the hospitals from being overrun, governments are urging people to stay at home. But to try to limit the blow of people being out of work the government will be issuing a stimulus check to millions of out of work Americans.
The facts, according to the IRS you could receive up to $2400 if your income falls within the range below:
- $75,000 and below filing single can receive up to $1200
- up to $112,500 for filing head of household can receive up to $1200
- up to to $150,000 for married couples filing joint returns can receive up to $2400
If your income falls within the range below you will receive a reduced amount:
- $75,000-$99,000 for single or married filing separately
- $112,000-$136,000 for the head of household
- $150,000-$198,000 for married filing jointly
So with many Americans expected to receive a check from Uncle Sam, the question I am getting as a tech person is what they should buy. So my answer may surprise you. Will I suggest the new Galaxy S20, Galaxy Z Flip, a discounted Pixel 4XL, or maybe snag that Pixel 4a or One Plus 8 Pro?
How about none of them.
As much as I am a tech fan I am also about people being financially literate. There is no such thing as free, especially when it comes to the government. For one, the government does not have money. They are not a money-making entity. The government gets its money from us in the form of taxes. Since they still have not received all their taxes from us yet, as some wait until the last moment of the 15th of April to file, the money must come from somewhere. And it is expected that the government is borrowing from next year’s tax returns to get people money now. So do not be surprised if next year no tax return is available in the mail.
With all that being known I would actually recommend putting that money into a savings account. The purpose of that money is to provide the bare essentials (ie food) so that families can get by until the economy opens back up. And since we do not know when that day is, as of yet, it would be very unwise to go out and buy anything with that money unless you need it. And “NEED” does not mean a phone, tablet, or gadget. Use what you have until this passes over (this being the Pandemic). Now would also be a good time to look back at your budget and cut services that you do not need. Those services may include cable, Netflix, Disney +, and any service that is just sucking money out of your account. At this point, EVERY dollar matters. Don’t waste it on frivolous spending.
As for the question about investing that money, I personally would not invest it. I know the economy is ripe for buying, and I personally have been using this time to invest. But I personally will leave that money in savings, even with the fact that you lose money in just leaving it in savings versus investing. But this money is meant to be liquid for an emergency. If you’re waiting on unemployment this can be that gap to try and help with food. And even if you’re someone still working, it is a matter of having something in place for an emergency. As many Americans do not have an emergency fund in place. So consider this your emergency fund.