28 May

What to Do with Your Stimulus Check

By now, most of you have probably received your stimulus check of up to $1,200 per adult (and $500 per child) as part of the federal coronavirus relief package. This money is meant to help U.S. households withstand the coronavirus pandemic and pump some extra cash into the economy by encouraging consumer spending.

Depending on your financial situation, the best use of your stimulus check will be different. If you’ve been laid off from your job or experienced a loss of work hours or other income loss due to the COVID-19 crisis, then you’ll probably use this stimulus check to help meet your immediate financial needs. If you are still employed and receive your usual paycheck, this stimulus money could potentially help you to shore up your savings or invest for the future.

Here are some ideas on how to use your coronavirus stimulus check to get the most value, based on your financial priorities.

Cover Basic Essentials

Have your hours been cut because of the coronavirus, or has your employer reduced a certain percentage of salaries? Use this money in your paycheck to patch a hole. Depending on how much money you’ll be missing, you may be able to break up the stimulus check funds to help you get a “full” paycheck for a few months. Hopefully, you have already been able to sign up for the latest extended unemployment insurance if you’ve been laid off or furloughed from your work. But even if you get unemployment, your stimulus check will still be useful to pay bills.

If you’re unemployed, you should be strategic about how to use the stimulus check funds is important. Since the stimulus check is a one-time payout, and your unemployment benefits continue for a while, you might want to set aside the stimulus check as a temporary “mini-emergency fund.” You could use this mini-emergency fund for a few different financial goals during the next few weeks or months.

The stimulus check can also be divided to help you make partial payments on your rent or mortgage. If you are unable to make a full rent or mortgage payment, talk with your landlord or lender as soon as possible.

Pay Down Debts

At a time when so many lenders and credit card issuers are offering relief and forbearance to borrowers, it might seem strange to talk about using your stimulus check to pay off debt. But paying down debt also can be a good option for your stimulus cash, depending on your situation and goals.

For example, what if you owe just a few more payments on your car? $1,200 could potentially pay off a few months’ worth of car payments and save you some money on interest.

What if you have some debt that, for whatever reason, you don’t want to refinance, renegotiate or ask for loan relief for, such as medical debt, student loans, or a long-delayed credit card balance? If the $1,200 stimulus check will help you have peace of mind by paying off debt, go ahead and do that.

Paying off debt is almost never a bad financial move. But think carefully about how to prioritize your debt payments. Even in these uncertain times, it’s usually a good idea to pay off the highest-interest debt first, such as credit card debt.

Don’t feel like you have to be in a hurry to put all your stimulus money toward paying off debt. Look at your options for forbearance or payment deferrals first; many banks are offering relief to borrowers. If you can get some relief on your debts for a few months, you can hold on to that stimulus money and decide how to use it later.

Boost Your Emergency Fund

You may want to put some or all of your stimulus check into an emergency fund if you don’t have debt or if your debts are manageable, and you don’t have an adequate cash emergency fund in the bank. In times of uncertainty, by having cash in the bank, a lot of people feel an extra sense of calm and confidence.

If you don’t have any immediate bills that threaten to go unpaid, you might just want to put your stimulus check into a high-yield online savings account and let it accrue interest for now.

Invest for the Future 

What if you already feel pretty stable financially, even in the middle of this crisis? You will want to use your stimulus check to save for the future if you already have an emergency fund of three to six months’ expenses, you do not have urgent debts, and your work is safe.

RMLEFCU is here to help our members. We are offering our services to help you and your family during these uncertain times and encourage you to contact us if you need financial help. If you have any questions, please call us at 303-458-6660 or email us at lending@rmlefcu.org.

02 Apr

Keep an Eye Out for COVID-19 Phishing

It’s no surprise that when there is a crisis, there are bad guys quick to swoop in and take advantage of a concerned public. COVID-19 scammers are on the prowl — so warn loved ones to be alert while on their phones and online. Phishing is already being reported: criminals disguised as charities seeking donations to help those in need.

Scammers and fraudsters are scrounging for card numbers, account numbers, and online banking information by communicating using text, phone, and email. In other words, little numbers that spell big disaster for the unsuspecting. Be scrupulous with your financial data and remember you, yourself may be savvy enough to spot these scams, but others are more susceptible, particularly the very young and the very old.

Remind them, as you remind yourself:

  • Never respond to or open any COVID-19 related emails or email links requesting financial or private information, unless you can confirm you know the individual who initiated the request.
  • Be vigilant and wary of opening an email or email link of any kind if it is from an unrecognized sender. Emphasize to elders in your family that watching out for bad guys does not make you a bad samaritan.
  • Never provide information when requested. Scammers succeed because their approach looks legitimate.
  • RMLEFCU will never call and ask for personal data. NO FINANCIAL INSTITUTION will do that.
  • If a caller claims to be your healthcare provider asking for financial assistance to combat COVID-19, do not take it on face value. Hang up and call your provider’s office number and they will confirm it.

Stay educated and alert by following news reports on phishing during this critical time. Take measures to protect the financial health of those around you, even as you protect their personal health. Ongoing education and awareness are key to keep the fraudsters away from you and your family. If you have any questions or concerns, please call us at 303-458-6660 or email us at members@rmlefcu.org. We want to keep you and your bank account safe.