Stimulus Checks are Arriving - What You Need to Know!
94% of Americans will get money, in some amount, from the federal government either via direct deposit or via Treasury check. You and some of your family members may receive payment depending on whether or not you qualify. The IRS is fast at work on a new website tool to allow you to track the timing and progress of your check/deposit. They hope to have the website running later this week. The first to receive stimulus money are those with direct deposit on file with the IRS because they file their taxes electronically. Those that have direct deposit with the IRS may have already received that deposit this week (week of April 13th). For those that don’t have direct deposit, the government is considering developing a web portal allowing you to upload banking information which would enable you to receive stimulus payments by direct deposit. When it becomes available, it will likely be posted CLICK HERE.
Ultimately, if you don’t have direct deposit, you will receive a Treasury check in the mail. The first round of checks will be mailed April 24th, initially to the lowest income Americans. Mailings will continue through May 15th until all who qualify receive their stimulus check. For those who don’t file taxes due to their income level, the only way to receive the stimulus is to register using this site: IRS web page eligibility and register non-filers. This is particularly important when thinking of your young adult kids or grandkids who are in their first year or two of independence yet have not filed a tax return due to low level internship or summer job income.
This stimulus is available to a very broad group. Read more about eligibility: https://www.irs.gov/coronavirus/economic-impact-payment-information-center
What should you do with your stimulus payment?
- If your income is reduced (or soon to be reduced) given job loss, furlough or reduced hours, use it for your basic monthly expenses
- The primary reason for this stimulus is to be used on housing cost, groceries, utilities, home repairs that are urgent, etc.
- Save it in cash for if/when your cash savings is depleted. Avoid credit card and other high-interest debt.
- Spend it before you borrow. Delay having to take a 401k withdrawal or a loan, or any other form of borrowing.
- If your income is well-protected, consider using it to meet another’s basic need such as family members that need financial support during this crisis.
- If your income is protected, and you have a buffer cash, consider spending it! The secondary reason for the stimulus (besides meeting basic needs) is for money to be spent to help boost the economy. Otherwise the ripple effect will not occur, and it will take longer for the country and corporations to recover.
- Pay a service professional in your life who has less work/less income right now
- Pay a contractor for a project
- Pay someone who is now unemployed and who has taken their business online or to social media
- Patron a local small business (restaurant or other) operating on limited hours and aims to bring back key employees
- Buy a product now that you would have waited to purchase later in the year
- Donate to a food bank or other local charity serving those impacted by the crisis.
We believe it is important for the economy that you consider spending your stimulus check opposed to investing. In our opinion, saving defeats the purpose of economic recovery. The road to stock market (and portfolio recovery) involves consumer spending and the financial security of small businesses (not just corporations). We encourage you to spend it or gift it.
Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Any information is not a complete summary or statement of all available data necessary for making a financial decision and does not constitute a recommendation
