PHOENIX — Stimulus checks are rolling out. Individuals will receive $1,400 and couples will get $2,800.
For many, that’s a lot of money at once.
Michael Sullivan, a consultant with the nonprofit Take Charge America, said that people should take care of business first.
“There may be a rush to buy a large screen TV. You certainly don’t want to do that,” said Sullivan.
Pay your expenses
“If you have rent, utilities, food, those are the sorts of things this money is really for. And you want to use it for that to keep your situation, your household viable for another month, two or three,” said Sullivan.
Pay down debt including credit cards, car loans, student loans
“Your highest interest debt is costing you the most money. So, if you can and you have extra dollars, put them towards that high interest debt,” said Sullivan.
Make sure your emergency savings are current
The pandemic has shown that an emergency fund bank is the best way to plan ahead for unexpected money losses. Sullivan suggests six months worth of savings to be safe.
“If your rent, utilities, groceries, car payments and all that – if that’s $3,000 a month – for example, that means you should have at least $18,000 in emergency savings,” said Sullivan.
“If you’re in that good of financial shape, you’re probably paying taxes. So, certainly use it to give right back to the government,” said Sullivan.
For more information on credit counseling and debt management, visit the Take Charge America website.
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