Stimulus check: Tips and tricks on how to best use your money

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The $1,400 stimulus checks from the latest relief bill started appearing in many Americans' bank accounts this week, with approximately 90 million payments totaling $242 billion distributed by Wednesday afternoon (March 17). 

According to the Treasury Department, the first round of payments included direct deposits for people who filed tax returns in 2019 or 2020 as well as a handful of mailed paper checks. The IRS will continue to process the distribution of deposits, checks and debit cards in the coming weeks.

Individual taxpayers who had income of $75,000 or less on their last filed tax returns, and couples who made up to $150,000, are receiving stimulus payments of $1,400 per person, with the same amount allotted for each claimed dependent. 

Taxpayers who made between $75,001 and $80,000 ($150,001 and $160,000 for couples) will get prorated payments. 

So once you've received your stimulus payment, what should you do with it? It depends on your employment status, how much debt you have and your overall financial stability. 

Here are some of the options suggested by experts. 

Take care of the basics with your stimulus check

For many Americans, stimulus checks are crucial — if still insufficient — for covering basic needs. Paying for living expenses like food and shelter, as well as utilities such as water, heat and electricity, for yourself and your family should be the first priority. 

Pay (or catch up on) important bills with your stimulus check

If you've fallen behind on other high-priority bills, including internet access, cellphone service or cable TV, you may want to use part of your stimulus payment to get back on track. 

Use your stimulus check to prepare for 2020 taxes

Your stimulus payment itself is tax-exempt, but 2020 tax returns and payments are still due May 17. (That's pushed back from the normal date of April 15.) If you think you might owe taxes this year and don't need the entire stimulus check for basic needs, then set aside some funds to cover that bill.

Pay off high-interest credit-card debt with your stimulus check

If your current living expenses are covered, you might want to pay down the balances on high-interest credit cards, especially if you've accumulated credit-card debt in the face of pandemic-related financial hardship. That falls in line with what billionaire Warren Buffett has suggested in the past regarding similar situations.

Put your stimulus check in a savings account

Suze Orman, a personal financial expert and host of the "Women & Money" podcast, recommends saving the stimulus money instead of paying down debt or catching up on bills. 

She stresses that this is especially important if you don't have a stable income or are worried about losing your job. Orman is an advocate for putting money aside for emergencies while paying only the minimum on credit cards or loans. 

Spend a little bit of your stimulus check

If you're in a stable financial position with solid employment, you may want to spend a small amount of your stimulus check on something you enjoy, such as a COVID-safe activity or an item you've been wanting to purchase. However, avoid costly impulse buys without careful consideration of your larger financial situation. 

If you don't need every dollar, then you may consider donating part of your stimulus check to an organization, such as a mutual-aid group, that's been supporting your community through the pandemic. 

Emily Long

Emily Long is a Utah-based freelance writer who covers consumer technology, privacy and personal finance for Tom's Guide. She has been reporting and writing for nearly 10 years, and her work has appeared in Wirecutter, Lifehacker, NBC BETTER and CN Traveler, among others. When she's not working, you can find her trail running, teaching and practicing yoga, or studying for grad school — all fueled by coffee, obviously.