A second stimulus check could be coming: Here's how experts hope you'll use it

You may get a second stimulus check as part of a new coronavirus relief bill proposed by the Senate. Here's how experts suggest you save and spend that money wisely.


While Democrats and Republicans continue to negotiate a new coronavirus aid bill, both parties agree that Americans need a second round of stimulus checks. And, should it get to you, experts want you to make smart choices with that money.

The HEALS Act announced earlier this week proposes checks in line with those distributed as part of the CARES Act earlier this year: up to $1,200 per adult, and up to $500 per dependent. But a change in who counts as a dependent could mean some 26 million more people qualify for a check this time around. 

This latest stimulus package is far from a done deal, though: Congress still needs to negotiate a final package, pass it, and send it to President Trump to sign into law. Those discussions are expected to continue into August, according to CNBC. And it's hard to say how soon you might expect to receive a second stimulus check after a deal is struck.

Even so, it's important to plan ahead. Calculate how much money you might expect to get, and think about how best to use the check — especially considering that the economy is still shaky and unemployment benefits could be getting slimmer.

Here's how two experts suggest you use the money from your second stimulus check.

Save what you can

The pandemic and its effect on the economy are far from over, so set yourself up for the future by saving as much of the money as you can, says Jamie Cox, managing director at Harris Financial Group.

Having that extra cash in the bank can help you if your financial situation later changes as a result of the pandemic. Only 41% of U.S. adults have enough savings to cover a $1,000 emergency, according to Bankrate.

Catch up on debts and bills

It's also smart to use the stimulus check to keep up with your rent or mortgage, auto loan, or other bills. "What we hope is that people will use it to stay current on loans, mortgages, et cetera, give them some headroom," says Cox.

That can help head off bigger financial consequences like eviction, repossession, or default, says Cox: "The stimulus money puts off into the future those particular bad events that typically come along with a recession."

How to spend a stimulus check if you're employed

Video by Jason Armesto

You don't want to spend more money than you can afford to now and regret it later, says Cox: "If you destroy your credit, it's going to be hard to get back to normal."

Be sure to reach out to your lenders for assistance, too. Many banks and credit card issuers have offered help during the pandemic.

Spend at local restaurants

Americans are still 30% to 50% below where they were last year in terms of restaurant spending, says Samuel Rines, chief economist at Avalon Advisors. Ordering takeout from a cafe or a beer from your local brewery is a way of helping the industry get back up to speed, he says.

Restaurants and related local businesses are "the ones that really need that incremental spending," he says. "They're the ones that could create the most jobs the most quickly. That's really where the juice from a spending package would help." 

How to help local businesses during coronavirus

Video by Courtney Stith

Remember to consider the context and the future

Of respondents who received or planned to receive a stimulus check, 63% said they used or planned to use it mostly on household expenses, according to the U.S. Census Bureau's experimental Household Pulse Survey's most recent data taken for July 16-21. About 12% cited paying off debt as a priority while 9% cited saving.

Although a second infusion of cash could help a lot of people make ends meet in the short term, experts worry that these checks, by themselves, won't be enough to offer substantive help for individuals or the economy. To really make a difference in people's lives, Congress has to do more to take care of the many people who are out of work and can't pay rent, says Rines, adding that a $1,200 check wouldn't counterbalance the HEALS Act's proposal to reduce the enhanced unemployment benefits to 70% of a person's income.

"It will hurt the economy," Rines says. "That will flow through to consumer spending. … That's going to be a significant headwind to recovery. We call it the consequences of a pause."

What happens after enhanced unemployment benefits run out?

Video by Stephen Parkhurst

In mid-July, Jamie Dimon, CEO of JPMorgan Chase, warned investors that people weren't yet feeling the full effect of this recession because of the stimulus money that flowed into the economy at the onset of this crisis. Cox agrees. "But the longer it goes on, the worse the effect in the end is going to be," he says. "So people need to be super-careful."

That kind of thinking makes sense to Nancy, an art gallery registrar in New York City who is currently unemployed and did not want to give her last name or age. She plans to save any stimulus money she receives, because she anticipates she may need it down the line. 

"I'm going to put it in the bank and just use it to pay off bills as soon as they come in," she says. "Especially since the $600 extra unemployment is going away. I'm probably going to be dipping into my savings to just live." 

Planning along those lines is wise, says Cox: "I think what people should do is save it for a rainy day, because there may not be another one of these stimulus checks coming."

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