Stimulus Updates and Resources

A 'typical family of 4 might be bringing in $10,000' in stimulus and tax refunds — here's what to do with the money

"See if you can turn that stimulus into a real windfall."


Now that President Joe Biden has signed the $1.9 trillion American Rescue Plan into law, money is going to start moving fast. In addition to extending the federal boost to weekly unemployment benefits and expanding the Child Tax Credit, the new legislation is also sending individual stimulus checks up to $1,400 that could hit your bank account as soon as this weekend.

That extra cash, in addition to the $600 that most Americans received in January and their forthcoming tax refunds, which so far this year have averaged about $3,000, could add up to substantial windfalls for consumers, says Ted Rossman, an industry analyst at

"Your typical family of four might be bringing in $10,000 this quarter, between the January stimulus, the March stimulus, and the typical tax refund," Rossman says.

The economic stimulus and tax refunds will be particularly crucial for lower-income households: More than 60% of individuals making less $40,000 a year said their tax refund is very important for their overall financial well-being, according to a recent survey by That's almost 20 points higher than the general population and nearly 20 points higher than it was for the same group last year.

If you're anticipating a $1,400 stimulus check and even more money from your tax refund, you might want to make a plan for how best to use these additional funds. Here's how money experts say you should allocate your stimulus check.

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Take care of expenses: 'Look at what's been put off'

If there's an expense you've been meaning to take care of, but money has always gotten in the way, tackle that first, says Susan Bradley, a certified financial planner and the founder of Sudden Money Institute. This could include paying rent, she adds: "That's a legitimate use."

If you're caught up on immediate expenses, turn to less time-sensitive costs.

"Look at what's been put off," Bradley says. "Is it paying down a credit card? Is it fixing the car? Is it a medical procedure? So many people put off things they can kind of live without, but if you do that for too long it has some pretty negative consequences."

So many people put off things they can kind of live without, but if you do that for too long it has some pretty negative consequences.
Susan Bradley
founder of Sudden Money Institute

This is especially true for high-interest debt, says Mark La Spisa, a certified financial planner and president of Vermillion Financial Advisors. "If I was talking to my nephew or my son or someone in their 20s and 30s, I would tell them to do a real quick check of their debt."

If your debt is under control, then the stimulus check should be put toward an emergency fund, he says. Paying down debt and creating an emergency fund "are two basic areas I would say to explore prior to doing anything else with [the check]," La Spisa says.

'Strengthen who you are, financially'

Once those financial basics are covered, you can focus on building wealth, La Spisa says. "See if you can turn that stimulus into a real windfall where you can use the benefit of compounding interest to really start developing some wealth," he says.

You can look at putting the money toward retirement, too. "If you took $1,400 and you compounded it to retirement, that's going to be a sizable chunk of money," La Spisa says.

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This is especially true if you've been lucky this year, according to Rossman. "It's very ironic to say, but I think a lot of people's personal finances are actually coming out of the pandemic in better shape, which I never would have expected," he says. "A lot of people are using things like stimulus and tax refunds to either boost their savings or pay down debt."

People who have weathered the pandemic without serious hits to their incomes, however, are in a position to significantly improve their financial health, Rossman says: "We've talked so much about this K-shaped recovery, but there's a lot of people who've weathered the pandemic just fine."

Nationally, total credit card debt is down and personal savings rates are higher than they've been in decades.

Whatever you do with these windfalls should "strengthen who you are, financially," Bradley says. "You could add to your savings. You could maybe even funnel a little bit toward your IRA or retirement plan." Stimulus checks are "not meant for retirement savings, but sometimes that's what strengthens people," she adds.

If you can, think long term, Bradley says: "Think of what will make you and your family more secure and more ready to take on all the great challenges of life a year from now, two years from now, or even an month from now."

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