*I am not a tax officer or a lawyer, I am writing this for my knowledge because I am curious about the stimulus checks. I am now passing this information on to you if you want to read more read the bill. This is for entertainment purposes*
I spoke about in my previous post about the stimulus checks and if ex-pats were eligible. It appears that foreign earned income counts as earned income. You would just have to make sure that you’re eligible under the other guidelines.
Now, what should you do with it?
This is under the assumption that you still have your job. If you have been one of the many Americans who have lost it in this pandemic then your bills are more important.
So, what should you do with it?
1. Pay down your debt
Americans have been taking on enormous debt, even before the pandemic, which has shown us where we are weak economically. According to the Federal Reserve – Americans and the U.S, in general, have reached a credit card debt level that has surpassed $1 trillion.
Student Loans? A whopping $1.6 trillion.
Auto Loans? Hold your breath. $1.1 trillion
So, your stimulus check can be used to bring down some of that high-interest debt. Especially if the interest rates on the savings accounts are lowering as quickly as they have been.
2. Beef up your emergency savings
Economic uncertainty means that having emergency savings is a necessary asset.
Can you hear the Capital One ad? “What’s in your wallet?”
Do you remember reading that Americans cannot afford a $400 emergency?
The data in the article is old, from 2018, however, it fully demonstrates how unprepared Americans are and that the majority are living paycheck to paycheck.
Dave Ramsey says $1000.00 is what you need. I say it is a minimum of 3 months living expenses, you can go as bare-bones as you like. It just needs to be your living expenses – rent, food, electricity, etc.
3. Buy the essentials
You should not hoard and go on a spending spree but buying what you need to weather this pandemic should be on your agenda.
If you are one of the individuals who is still working, then you can use this money for that. Data shows that the market rebounded greatly rebounded since the last recession and it only took 3 years to fully bounce back. The stock market is volatile and we have essentially erased the past three years gains. It also seems that the individuals who continuously invested in the past decades have done better than those who did not. As the general advice goes “Dollar-cost averaging.”