Still Holding On to Your Stimulus Check? Here’s How You Can Make It Work for You!Still Holding On to Your Stimulus Check? Here’s How You Can Make It Work for You?

Race Day Live If you’ve been holding onto your pandemic stimulus check, you are not alone. While many people spent their stimulus money years ago, others have kept it for various reasons.

Whether you were unsure how to use it or simply didn’t need it at the time, now could be a great opportunity to decide how best to use those funds.

Here are some simple, smart ways to make the most of your stimulus check.

Pay Off Debt First

One of the best things you can do with extra money is pay down any high-interest debt. This could include credit card debt, loans, or even personal debt that’s eating away at your monthly budget.

Arron Bennett, the Chief Financial Officer at Bennett Financials, suggests using your stimulus funds to reduce any high-interest obligations first.

The reason? Those steep interest rates are working against you, increasing what you owe each month.

By using the stimulus money to pay off debt, you’ll save on interest in the long run. This will give you more room in your budget and help you feel less financially stressed.

If you’re struggling with debt, this could be your chance to regain control over your finances.

Start Saving

Once you’ve taken care of any high-interest debts, consider using your stimulus check to start saving.

The easiest and safest option is to open a high-yield savings account. According to Thomas J. Brock, a financial expert at Annuity.org, these accounts can offer competitive annual returns of about 4.75%.

Even though the economy is uncertain, savings rates are expected to remain steady, making this a good place to park your money.

A high-yield savings account not only keeps your money safe but also helps it grow over time. Even if you don’t plan to use your stimulus funds right away, putting them in a savings account allows them to work for you while you plan your next steps.

Think Long-Term: Invest in Retirement

If you’re in a solid financial position and have no debt, it might be a good idea to invest your stimulus check into a retirement account.

Contributing to an Individual Retirement Account (IRA) or a 401(k) can give you tax advantages and help you build wealth over the long term.

Bennett recommends using your stimulus funds to contribute to these accounts, especially if you haven’t yet maxed out your contributions for the year.

Even with the uncertainty of the market in 2025, investing long-term in a diversified portfolio of stocks, bonds, or index funds can be a reliable way to grow your wealth.

Historically, these investments have shown positive returns over time, so using your stimulus funds to secure your future could be a smart move.

Read More:

Invest in Your Future: Personal Development and Side Hustles

For those thinking about a career change or already running a side hustle, your stimulus check could serve as the perfect opportunity to invest in your personal development.

Bennett suggests using the money to improve your skills or enhance your business.

Whether that means taking courses to learn new skills, upgrading software or equipment, or increasing your marketing efforts, these investments could lead to long-term benefits and growth.

If you’ve been wanting to start your own business or expand an existing one, this could be your chance to make that leap.

The skills and equipment you invest in now could pay off greatly in the future. Don’t forget to consider the importance of investing in yourself!

Be Smart About Taxes

Before making any final decisions on what to do with your stimulus check, it’s important to keep taxes in mind.

Bennett advises consulting with a tax professional or a CFO who specializes in advanced tax strategies.

They can help you navigate different tax-advantaged accounts like Health Savings Accounts (HSAs) or 529 plans for education. These accounts can help you grow your money while minimizing taxes, making them a valuable part of your financial strategy.

Remember, the government is still a factor in how much you keep, so it’s worth considering how your actions will impact your tax situation in the long run.

Conclusion

Ultimately, how you use your stimulus check depends on your current financial situation. If you have high-interest debt, the best move is to pay it off.

Once that’s taken care of, consider saving, investing for retirement, or even using it to improve your skills or business.

Just be sure to consult with a professional to make the smartest decisions for your money. Your stimulus check may have been a one-time opportunity, but with the right choices, it can work for you for years to come.

Reference

Disclaimer- Our team has thoroughly fact-checked this article to ensure its accuracy and maintain its credibility. We are committed to providing honest and reliable content for our readers.