What Should You Do with Your COVID-19 Stimulus Check?

What Should You Do with Your COVID-19 Stimulus Check?

by Jacqui Kearns, Chief Brand Officer

With the COVID-19 pandemic continuing into 2021, and large parts of the country still under partial lockdown and economic duress, Congress and the president acted last month1 to provide another stimulus/relief package. As with the original package back in Spring 2020, this one included stimulus checks for households: $600 per adult and per child for individuals with adjusted gross incomes under $75,000. This will be welcomed by many families struggling during this time. But with all the economic uncertainty, you may be wondering exactly what you should do with your relief money. The answer to that question depends on how the crisis has impacted you and on your overall financial wellbeing, which we define as how secure and independent you feel about your finances.

man writing on paper

When should you spend your COVID-19 stimulus check?
If you’re currently in a precarious financial situation – such as having been laid off from your job due to the COVID-19 crisis, or having had your hours cut back – you may have no choice but to spend your stimulus check or tax refund on essentials like food, rent or medical care. Though calling the aid “stimulus” implies that the government wants you to use it for consumer spending, the reality is that for many families whose finances are a bit unsteady, this will be a lifeline rather than a boost. That said, if you currently have plenty of savings and a steady income, you may want to do your part to stimulate the economy by spending your check on non-essentials, like ordering out for food to support local business, online retail or new subscriptions to streaming services to keep yourself entertained during the ongoing lockdown. Alternatively, you can think about donating the money to a worthy cause.

When should you save it?
If you fall more into the middle of the wellbeing spectrum – for instance, you’re still working but you don’t have a high income or more than a few months’ worth of savings – you probably shouldn’t spend your government money, if possible. Rather, now is a good time to build up your savings, considering that in spite of there now being a COVID-19 vaccine, it may take until Fall 20212 for life – and the economy – to get back to normal, meaning that even if you haven’t yet been impacted, there’s a possibility your income may suffer in the long term. Affinity offers a savings account called SmartStart that inverts the traditional model of earning interest; rather than having a minimum deposit before interest begins to accrue, interest starts accumulating right away at a relatively high 2% annual percentage yield until you save $2,500, at which point your APY begins to move back down to the standard rate. The SmartStart account, which has no minimum balance or opening deposit, is a great way for people who don’t have much money set aside to get started while making some additional money off interest – and now is a smart time to start.

When should you invest it?
As with spending stimulus money on non-essential items, investment is something you should do if you are feeling financially steady and likely to remain so. Since this crisis may last longer than anyone would hope, you’ll want to make sure you have plenty of liquid assets – i.e., you can access your money when you have to. Investing money is generally a good idea, but make sure you can afford to not have your cash readily available in a bank account before you do so. Also, if you’re new to investing and don’t know much about asset management, consult a reliable, certified expert. If you’re an Affinity member, you can speak with one of our financial advisors about different ways to invest your extra money and plan for your future. But again, if you’re worried about making ends meet, focus first on funding basic purchases or building up your emergency savings.

The COVID-19 pandemic has tested our resolve over this past year in never-before-seen ways, but Affinity is working hard to help maintain our members’ financial wellbeing and provide valuable financial insights. As lockdowns continue and businesses and households continue to face challenges, there may be more government help coming3, and we’ll be here to help you make sense of it all and make it work for you.


This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition are made.  

1 Retrieved from https://www.wsj.com/articles/

2 Retrieved from https://news.harvard.edu/gazette/story/2020/

3 Retrieved from https://www.foxbusiness.com/economy/2000-stimulus-checks-first-things-schumer