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What should I do with my stimulus money?

If you qualified to receive one, you’ve certainly received your COVID-19 stimulus money by now. It consists of two of my favorite things: Free and Money.


Stop. I know, I know. It’s not free. We paid for it with our taxes. It will certainly cost us in the long term and I hope it’s not a burden we pass on to our kids. But. . . that’s an argument for another day.


I think there are three basic options for what to do with your 2020 economic stimulus check. Save it for an emergency fund, spend it now, or invest it for the long term.


Save For Emergency Fund

If you don’t have an emergency fund or alternative savings, this should probably be one of your top priorities. As always, everyone is unique and financial situations vary, but having an emergency fund is one of the foundational pieces of every financial plan.


Emergency funds save you from unexpected large expenses like medical bills, house repairs, car repairs, really any unforeseen expense that you haven’t had time to save for. They prevent you from having to take high interest debt which is incredibly costly.


High interest debt is a downward spiral. It’s easy to get, it accumulates quickly, and it can easily get out of control. While there are circumstances it’s justified and can be helpful, for most, it can be financially devastating. Best to avoid if possible and having an emergency fund helps in a big way to avoid it.


Spend It!

You can spend your stimulus money. Obviously. You can always spend your money.


If you have high interest debt that your stimulus will eliminate or mostly eliminate, do it. If you have some medical procedure you’ve been delaying, but would improve your quality of life, use it. If you have bills that need to be eliminated and the stimulus will help you get current or ahead, by all means. If you’ve been a good saver and need to spoil yourself or splurge, go nuts.


I’m never going to advise someone not to spend their money. I will advise there are other options and there may be benefits to saving, but part of financial planning is enjoying life today while planning for the future. Today is here and you should make certain to enjoy it while you can, but you also need to make sure you have a plan for a happy future. So, if appropriate, SPEND IT!


Invest Long Term

If you have a financial plan and are working it already or already have stable cash flow and an emergency fund, investing for your future is a great idea.


Some options to consider are what tax classification to invest in. Should you invest in a TOD account? Should you use a Roth IRA? Maybe a Traditional IRA? Do you qualify to save to a Traditional IRA or Roth IRA? These are important to know before you make a decision here.


Make sure you understand the rules before choosing what type of account to invest in, if you don’t know or don’t want to do the research, it may be best to consult a financial advisor. The best financial planner for you can be difficult to find, but I won’t go into that right now.


Another consideration is how risky should you be invested. Do you have other investments? Is this part of your LOOOOONG term savings? Or medium term? You need to know how long you are willing and able to leave these funds invested to know where it is most appropriate to invest them.



The best financial solutions are not universal. When deciding what to do with your stimulus money or any financial decision, you need to consider your situation and goals to determine what is best for you and your family. There are always options, so whenever you’re making financial decisions, make sure you understand them all and consider all options. I always recommend consulting a financial professional to get an unbiased opinion.


Three of the options for what to do with your pandemic stimulus check are save for your emergency fund, spend it now, or invest it for the long term. There’s no right answer here, it will depend on a lot of factors, but I recommend you think about it before making a decision and don’t just spend without considering your options.


The best financial advice for you is not necessarily the best financial advice for someone else. Financial planning is unique to every family and plan, make a plan, review it regularly, and get help from a financial planner near you if it’s needed.


If you’d like to discuss your financial situation or create a financial plan, Telos Financial welcomes the opportunity to talk with you. Contact us today to schedule a no cost or obligation introductory meeting. Telos is a financial planning firm serving Michigan’s high income and high net worth millennials, recent college graduates, and small business owners.


Thanks for coming back for the latest edition of Planning for your Purpose, Telos Financial’s blog, where I discuss different topics related to financial planning. CERTIFIED FINANCIAL PLANNER™ professional Dennis LaVoy is Plymouth, Michigan’s holistic financial advisor serving clients throughout the mitten as well as across the country.


The primary purpose of the blog is to introduce financial planning concepts and questions I receive from clients that I believe are important. I want to start discussions that will educate, benefit, and improve your financial life, ultimately, to help you focus on your telos!


Telos Financial is a fee based, holistic financial planning firm located in Plymouth, Michigan serving young professionals and their families. Dennis LaVoy is a Certified Financial Planner® Designee and a Chartered Life Underwriter®. Dennis is proud to be a firm based in Michigan focused on serving high net worth and high-income young professionals, millennials, and those preparing for retirement. He founded Telos Financial and to provide fiduciary financial services to families across Michigan including Plymouth, Canton, Ann Arbor, Detroit, and as well as all over the great United States of America.