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The 2021 Stimulus & Your Future

Kristen Ahlenius — The third round of stimulus either hit your bank account this weekend, will deposit sometime this week, or is headed to your mailbox shortly. Since the last round of stimuli it’s likely your financial stability has changed (for better or worse). Whether you saved or spent your previous checks it’s important to decide what to do with this influx of cash (hopefully) before it lands in your bank account. If you’re not sure where these funds are best allocated, we can help. Generally speaking you should always know where your next dollar should go. It doesn’t matter if this dollar is from coming in under budget, a birthday card from grandma, or from the government.This pandemic had many unique ways to push your financial health. Whether you've lost an income, your childcare costs increased, or you’ve used available funds to cope, you might be behind. If this is the case:

  • Use the dollars to bring yourself current (or as close as possible).
  • Prioritize the liabilities where you’re the furthest behind or those which could impact your needs (think electric bills).
  • If you aren’t sure which liabilities are the most pressing, please send us an email. We can help you determine where to place the available dollars.

If you’ve made it through the majority of the pandemic with all liabilities current, you should next protect your future. 

Your goal should be to maintain 3-6 months of emergency savings. The monthly amount is dependent on what it takes to maintain your household at a very basic level. If you were to lose an income, you could be more mindful of grocery spending (think more Ramen and less steak), you could turn the thermostat up a bit, and cut out unnecessary Amazon spending. What you can’t do is stop eating, avoid using your A/C in the middle of the summer, or eliminate spending for basic human needs. If you don’t have a few months of these bare minimum expenses saved, that’s where your stimulus check is going. All of it.

What if you maintained your income/expenses during the pandemic and you have an established emergency fund? You have the privilege of using these dollars, now. 

Truly the stimulus dollars are for just that, stimulating the economy. If you’ve taken steps to secure your financial stability you should consider using these dollars for their intended purpose. In this case, please remember to shop local. Walmart and Amazon don’t need these dollars like your local stores do. Try to seek out businesses in your community which have been impacted the most. If you’re unsure where these dollars are best served, the hospitality industry is always a great place to begin. Make sure this purchase doesn’t introduce a new item to your monthly budget. Your stimulus check might be able to buy that new spin bike, but it also introduces an indefinite monthly subscription.

Remember, you should always know where your next dollar is headed. If you need to catch up, start there. If you’re on time but aren’t prepared for an emergency then saving is your priority. Most importantly, if you’re spending your stimulus check make sure those dollars are staying local. Trying to determine which category best serves your financial stability can be difficult. If you find yourself struggling with determining where your financial stability is best increased, give our team a call or send us an email. We will be happy to help you work through these details.