The largest ever economic stimulus package — a $2 trillion coronavirus relief bill — passed in the Federal Government last week. A portion of that $2 trillion is earmarked for individual Americans to help alleviate financial struggles. The plan calls for making direct cash payments of up to $1,200 for individual taxpayers, and $2,400 for couples. Another boon for out-of-work individuals is an expansion of unemployment benefits to include freelancers, furloughed employees and gig workers who previously didn’t qualify.
Will I get a $1,200 check?
According to NBC News, here’s how the direct payments from the coronavirus relief bill would work and who is eligible:
- If you are making up to $75,000 per year, you would receive a check for $1,200.
- Couples making up to $150,000 per year would receive $2,400.
- Families would get an additional $500 per child.
- Payment amounts would start to decrease for individuals making more than $75,000, and phase out entirely for individuals who make more than $99,000 per year, or couples who make more than $198,000 per year.
- A head of household will get the full payment if they made $112,500 or less in 2019.
The remaining funds from the economic stimulus package will be allocated to companies in need: $100 billion is going to hospitals, $350 billion will help small businesses, $500 billion is expected to go to large corporations, and $150 billion is going to state and local funds.
According to news reports, the coronavirus relief bill is expected to be enacted within days. Treasury Secretary Steve Mnuchin said he expects the individual checks (or direct deposits) to be sent out starting April 6.
If you’re having trouble understanding what will end up in your bank account, The Washington Post put together a calculator to help you figure out what to expect. The $1,200 amount holds true for those making up to $75,000 per year. The payment amount drops by $5 for every $100 you make over the $75,000 threshold.
If you’re a college student, you’re likely out of luck. The New York Times reports that college students are the forgotten age-group of this stimulus bill. At their age, they are too old to qualify for the child stipend (which is 17-years-old, per Forbes), but since many parents still claim their college-age students as dependents, they will not get a check of their own.
What to Do with Your Potential Windfall
If you’re lucky enough to still have a steady paycheck and don’t need a personal bailout from the coronavirus relief bill right now, this is an opportunity to use that $1,200 check to strengthen your financial safety net to get through the coming months. If you can, also consider earmarking a portion of your check to help others who may not be faring as well during the coronavirus crisis. Some ideas for wise moves to make with this money:
Bulk up your emergency fund. If coronavirus has taught you anything, I hope it’s that you definitely need an emergency fund. Take that check and direct deposit it into your high yield savings account. The future you will be so relieved. (See our HerMoney Emergency Fund How-To for guidelines on how much to save and where to put the money.)
Pay down high-interest debt. This is the perfect chance to chisel away at any debts you’re carrying that charge double digit interest rates. Why? Because you just got free money and have the opportunity to start over with a clean slate. (Here are the do’s and don’ts of credit during the coronavirus crisis.)
Save for retirement. If you’re not already contributing enough money to your 401(k) to get the employer match, hop to it! That’s free money and there’s nowhere you’ll get stock market returns better than that. Once you hit your match goal, fund a Roth IRA, which also can serve as a last-ditch emergency fund if you need to access cash down the road.
Buy into the market. The age old advice holds true even in a global pandemic: buy low, sell high. Now is as good a time as ever to buy stocks and get some money into the market. This will benefit you in the long run, and it will help to stimulate the markets.
Support local businesses. Small businesses are taking a huge hit, even with help from the coronavirus relief bill. Many will not survive. Make conscientious decisions about which stores to support: For example, order in takeout from your favorite neighborhood restaurant or stock up on goods from your go-to mom and pop convenience store. This will help to keep them in business during a time when no one is out shopping. Similarly, you can use a portion of your government money to buy gift cards from your favorite stores (for actual gifts for others, or for yourself to use when you’re ready). Doing so will give these businesses the funds they need now, and will benefit you later.
Donate, donate, donate. There are plenty of places that are in need of financial donations right now, like the American Red Cross, the CDC Foundation, and Feeding America. Your contribution will allow these organizations to do what they are meant to do. Check out Coronavirus-focused charity ratings on Charity Navigator.
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