As 2020 has shown us with the Coronavirus (COVID-19) pandemic, the unexpected can come along at any time.

To assist those affected, this spring the federal government has approved a $2 trillion stimulus package to support Americans during this time. In December, it was confirmed that around round of COVID-19 stimulus payments would be arriving.

The package includes payment for tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment.

People who typically do not file a tax return, may still be eligible to receive these payments, however, you will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

If you are an individual or family that will be receiving this check, planning how you and your family will use this money will benefit you in the long run and assist with your financial stability. While these are not all the instances possible for spending these payments, we’ve compiled a list of ways to use your stimulus checks, if you will be receiving one.

Get your finances back on track

For individuals who have already lost their jobs because of COVID-19 and its effects on the economy, the stimulus money can be a temporary lifeline to assist with getting finances back on track. The check should be used immediately to pay things like rent, mortgages, utility bills, and more.

Fund your emergency fund

An emergency fund is an amount of money you set aside to cover unexpected expenses or to cover necessary expenses if there are significant changes to your income. How much you need in your emergency fund is unique to you, your family, and your circumstances.

A recent poll showed that only 25% of U.S. adults have emergency savings. When things like the Coronavirus (COVID-19) arise, it makes you aware of why having an emergency fund is so vital for our financial health!

Most of the time, emergency funds are built slowly as excess funds from a budget are set aside and saved. If you don’t have an emergency fund, the stimulus check creates an excellent opportunity to start one as it can create a large portion, or in some instances a fully-funded emergency fund at one time.

Pay off debt

At First Southern National Bank, we’d love to see all of our customers and team members live debt-free, when possible. For those that may not need the stimulus money immediately, the checks could be an opportunity to pay down debt and to minimize the amount of interest accrued.

Pay ahead on bills

With the additional income that some individuals will be receiving, this could be a good time to see if your budget has room to pay ahead on some bills. With the future more uncertain than normal, it could be an opportunity to pay forward your rent, mortgage, utility bill, or another bill if you become affected financially due to the Coronavirus (COVID-19) down the road.

Local spending to boost the economy

As “nonessential businesses” were forced to close or enforce restrictions throughout Kentucky, supporting local businesses that are hurting from the coronavirus impact has never been more important. For example, while spending $40 at a local restaurant might not seem like a big deal, it can make a big difference if more people choose to support it.

Charitable giving

Generosity is one of First Southern National Bank’s core values. Giving is huge for us! We believe in sharing our time, our knowledge, and our resources with others. If you and your family don’t immediately need the money, many charities and organizations have felt the financial impact of the pandemic. Consider giving to a church, or families in need directly. If you aren’t already and can find a way, consider assisting in ways that are not necessarily monetary, while still practicing “social distancing”.

Disclaimer
While First Southern National Bank hopes you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.
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