How should you use that stimulus check? Economist weighs in with advice

How to get your stimulus check faster
Posted at 7:30 PM, Apr 18, 2020
and last updated 2020-04-20 08:48:38-04

People are now receiving federal stimulus checks worth $1,200, $2,400 and some even more, part of the more-than two-trillion dollar Federal Stimulus Package .

It was approved by congress at the end of March to help resurge the economy due to buisnesses closing and laying off workers because of the coronavirus pandemic, also known as COVID-19. It also included an extra $600 a week to those receiving unemployment benefits.

It may be tempting to spend on anything, but Bob McNab, an economist and professor at Old Dominion University, advised to control that temptation.

"I've seen this with friends on social media,” McNab said, “to celebrate the arrival of the stimulus check as sort of a reason to buy furniture, or take a trip, or do something extravagant."

That money is yours, but McNab advised to be wise with that money -- use it to pay your bills, debts, and for essential needs like groceries.

“Increase your emergency fund,” McNab suggested. “Make sure that you have a sufficient 'rainy day' fund so that if your hours are cut or if you have to be furloughed, unfortunately, that you can weather that event better."

That bit of advice, he stressed more to those who are currently laid-off, furloughed, or may be at risk of having their work-hours cut.

"That stimulus check and the increased unemployment benefits,” McNab explained, “are meant to tie you over until economic activity return."

For those who might want to help revamp the economy, you can do that, but McNab suggested you spend at your local businesses.

“Those people are hurting and they need customers,” McNab said. "Whether it's your local restaurant, whether it's your local brewery, whether it's just your local artist."

He cautioned against using that money towards risky choices such as gambling or the stock market because of how uncertain the financial future is.

"The market is very volatile right now, it would be like going out and buying lottery tickets,” McNab explained. “It's going to be an uncertain return."

There have been reports of checks going to those who may be deceased, such as relatives. If you receive a check made out to a deceased relative or someone who was close, McNab said to put that money to the side in case the federal government decides to claim it back.