As a result of the stimulus payments sent out to American taxpayers in March 2021, you now have $1,400 waiting to be spent. The IRS sent out these checks in order to stimulate the economy and alleviate the pressure of living costs in the midst of a worldwide crisis.
But is there a wrong way to spend your stimulus money? Here are 3 ways you should NOT spend your check if you want to best cater to your financial needs.
1. Shopping Sprees
With $1,400 freshly placed in your pocket, stores become a greater temptation than ever before. All the merchandise that you’ve been waiting to purchase is finally feasible to buy, but is it wise to pour your money into the items you want instead of items you need?
In order to serve your best interests, miscellaneous purchases that aren’t necessary for your housing, transportation, or health should be avoided. Your stimulus money can help alleviate the pressure of big costs such as rent or car insurance.
2. Stock Market Investments
Buying, selling, and trading stocks have the potential to help you make more money than what you started with. But this can only happen if you know how to navigate the stock market and invest in profitable shares.
Stocks are not a guaranteed money-maker, and if you’re inexperienced you should avoid investing a large sum of money into something you don’t yet understand. Unless you have the know-how or a trustworthy financial advisor to walk you through the process, your stimulus check would be better utilized if put toward immediate expenses.
If you’re looking to sell your house soon, home renovation or maintenance may be a worthwhile investment in order to add to the value of your home when it goes on the market. But buying new decorations or furniture for your home won’t have the same return on your investment as a renovation project.
Avoid the temptation to redecorate with your newfound stimulus money. If it won’t add to the overall value of your home, it’s not going to be a worthwhile purchase.