What to do when $1200 direct deposit hits your checking account.
As you probably know by now, through the CARES (Coronavirus Aid, Rescue, and Economic Security) Act, all those eligible should receive $1200 in the checking account that you typically use to file your taxes.
It is so easy to think of it as “Free Money!!” and spend it on something you’ve been eyeing for the past few weeks. However, spending all the money recklessly is actually the last thing you should be doing during a pandemic – and the economic uncertainty that has accompanied it. So, to help, here are 5 things you can (and should) do with the $1200 when it hits your bank account.
1. Spend it.
I know I just said you shouldn’t spend it, but you should absolutely spend it on necessities if you need to. If you’re a small business owner, have been recently unemployed, or are facing any kind of economic hardships from COVID-19, the CARES Act was passed to help families like yours with your necessities. Spend the money on food for the family, for bills, and for rent. That’s what it’s meant for.
2. Save it for a rainy day.
With the unemployment rate expected to be comparable to those of the Great Depression, there is no better time than right now to save up. Experts recommend that you have at least 3 months’ savings in your emergency savings, so while the $1200 may not cover the full amount, it can be a great start to your rainy day fund.
It’s super easy to set up a rainy day fund in your Goalsetter account. If you don’t have your own profile as a parent yet, just go to settings, set one up, and add a goal. Move money into it or set up a savings rule that best fits your needs.
3. Save it for the future.
School has moved to virtual. All meetings have been over Zoom. Movies and concerts are postponed or canceled. You’re spending less money on restaurants, entertainment, and impulse shopping. At times like these, it’s so easy to forget that in the near future, things will resume. Things like the new school year, camp, and even college are still coming for your family and it never hurts to start saving early.
Check up on your kids’ goals from their profiles and move some money into their goals. Goalsetter even gives 1% Cash Back Bonus for all your savings, and if you start saving early, you’ll be able to experience the magic of compound interest.
4. Take part in battling the pandemic.
Medical workers are at the battlefront against COVID-19, working arduously to keep everyone safe. If you want to do more than cheering them on at 7 pm every night, here are a few places we suggest you donate to:
- CDC Foundation backs CDC’s efforts to combat the coronavirus nationally. You can also create teams to donate together with friends and family.
- GetUsPPE.org secures protective gear, such as masks, gloves, and gowns for medical workers.
- Partners in Health helps developing countries who will be most vulnerable to the virus with needs like testing and care.
- Local hospitals near you may be accepting monetary donations as well. Research their websites to see where you can give.
5. Support your community.
Support your local small restaurants by ordering pick up or delivery from them. Ask them if they offer gift cards that you can buy and spend later.
Support your community members that may be dealing with food insecurities. We recommend donating to these following organizations:
- No Kid Hungry feeds children who have relied on school lunches.
- Meals on Wheels brings food to your senior neighbors who are most vulnerable to the coronavirus.
- Feeding America supports food banks across the country.
Follow us @GoalsetterCo across platforms as we continue to bring you Financial Literacy Month content and other ways to survive this together!
And as always, stay safe and stay saving!