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Successfully Spending Your Stimulus Check (or Any Sizable Amount of Money You Get Unexpectedly)

With so much uncertainty in the wake of the Covid-19 Crisis the government has attempted to ease some of the financial burden for families through a $1200 stimulus check, that as of the writing of this post, is a one-time payout.

However, unexpected, no-strings attached money can befall any of us at various times in our lives, and it is important we have a plan for how we apply that money. Unallocated money could come in the form of an inheritance, a high income tax return, or even bonus/promotion at work. Whatever the case, you should be sure to have certain aspects of your life in order prior to treating yourself with those “extra” funds.

Do I have an overall budget?

The first step is always a budget. If the word “budget” gives you a feeling of dread, let’s call it a “spending plan.” The quickest way to blow your money is to spend without planning or tracking. If you’re among the families and individuals who are eligible for the $1200 stimulus check, the first step would be to review how the pandemic has impacted your regular monthly budget. If you (or your spouse/significant other) have not been laid off or had your hours cut, chances the financial constraints associated with the global crisis have not yet hit your home. If the crisis has in fact affected your ability to maintain your normal budget, then you ask yourself the next question...

Are my basic needs taken care of? Will they be taken care of in the months ahead?

Some people are only one or two paychecks away from being completely “broke.” If a crisis (covid-19 or otherwise) has affected you prior to receiving an unexpected lump sum of money, then you will likely be using the funds to meet your most immediate needs. Shelter, food, and water should be at the top of this list. While you must prioritize these needs, this does not mean you shouldn’t have a plan for how to make the money last. For example, you can purchase foods that will last longer (such as pasta, frozen vegetables and fruits, rice, beans, canned goods, etc.).

If your basic needs are being met prior to receiving your stimulus check, or any other unexpected sum, then you may want to consider using the funds to plan ahead.

Is my Emergency Fund in place? Is there at least $1,000 in there?

An emergency fund is untouched money you have set aside in the event of a personal crisis/disaster. Experts say it should contain enough money to be able to cover three to six months of your living expenses. This can be a pretty hefty sum to save up if you’re barely making ends meet, or if you are spending what you make.

To start however, try to put aside at least $1,000 in your emergency fund. If a crisis has depleted your funds, you can use the stimulus check to replenish this account. Only use unexpected income for this purpose once you have a budget in place and your basic needs are met.

If your emergency fund is solid, you can use this money to “boost” it, or you can use these funds outwardly to support your local economy, invest in your own business, donate the funds, or invest in the market.

What if I don’t need the stimulus check?

The truth is the economic implications of the Covid-19 pandemic are likely to be far reaching and could take a while to manifest. This means that even if you don’t need to use the stimulus check right at this moment, you could need it down the line. Make a spending plan for the money and consider taking steps that will allow the money to grow.


For help managing your business finances, check out our services page. Desnoyers CPA, is an accounting firm that offers a wide range of services for business owners. Check out our monthly blog and join our mailing list to get more information for small business owners seeking experienced financial advice.


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