Americans just received stimulus checks of $1,400 per dependent. While some households will use the money to cover their bills and other needs such as food, some of you are looking for ways to invest it.
Here are 5 ways you can invest your stimulus check:
- Build your emergency fund
- Open a high-yield savings account
- Invest in stocks
- Pay down debt
- Use it for a startup
#1. Build your emergency fund
If you don’t have a minimum of $1,000 in your emergency fund be sure to put this money away first.
This is money that is available to you should some unprecedented occur. This money is helpful when you’re obligated to take care of a car repair, medical expense, or other emergency.
If you only need to allocate a small portion of your stimulus check to complete your emergency fund, even better. You can move some money over to a high-yield savings account.
#2. Open a high-yield savings account
If you’re a returning reader you more than likely already have one of these open.
Unlike an average savings account, a high-yield savings account pays you small interest on your money. Some banks vary from 0.40% to 0.70%
Here’s a list of banks you can check out:
- American Express 0.40%
- Nationwide 0.70%
- Ally 0.50%
- Marcus by Goldman Sachs 0.50%
To put things into perspective, if you bank with an average bank such as Wells Fargo, Bank of America, or Chase, they’ll pay you 0.01%.
Opening a high-yield savings account is easy and very safe. Most banks are FDIC insured up to $250K meaning your money is protected.
If you’re afraid of your stimulus check collecting dust but want to make a safe investment with very little volatility then a high-yield savings account is right for you.
#3. Invest in stocks using your stimulus check
Stocks are a great way to multiply your money. Although you must know investing in stocks can be quite volatile.
This should not refrain you from investing in the market however. More people are opening their own brokerage accounts and purchasing shares.
Just recently we’ve seen new retail investors put their stimulus checks in heavily shorted stocks as a means to create a short squeeze. We’ve seen this happen with GameStop.
If your stimulus check just so happens to be an extra check, consider investing it in stocks. Right now is the perfect time to buy as most of the market is on sale!
Read: How to invest in the stock market (step by step)
#4. Pay down debt
If you’re a little behind on credit cards or other debt, you can use your stimulus check to pay down debt or completely pay it off.
The great thing about your stimulus check is that even if you only receive one, that means you can break down $1,400. Maybe move $400 into your emergency fund and use the other $1,000 to pay off debt.
Money is a tool you can use. Don’t forget you can break it down accordingly.
And we’re only talking about $1,400. Some of you received twice if not four times the amount. This means you have more means of allocating your stimulus check to accounts where you see fit.
#5. Use your stimulus money for that startup
Have you been wanting to start a business from scratch? Maybe you’ve been wanting to start an online business but need a website.
You can use your stimulus check for that startup. Create a professional website using BlueHost, and even start using a professional email with less than $100.
That stimulus check could have just been the best investment of your life. Starting a business is so rewarding. Not only do you make your own schedule, but the income earning possibilities are extraordinary.
Read: How to start a blog in 2021 (It’s super easy!)
While some people may need their stimulus check to survive, you don’t. You’re here for a reason. Put your money to work in assets that are going to provide you with some sort of return.