May 5, 2020

Smart Ways to Use Your Stimulus Check


The stimulus checks promised in the Coronavirus Aid, Relief and Economic Security (CARES) Act continue to land in personal accounts and mailboxes around the country. The $1,200 per adult—or $2,400 for married couples filing jointly—and an additional $500 per child, subject to income limits granted to most middle class adults is a welcome relief during these financially trying times.

Many recipients may be wondering: What is the best way to use this money?

To help you determine the most financially responsible course of action to take with your stimulus check, we’ve compiled a list of advice and tips from financial experts on how to put your stimulus money to work for you.

Cover your basic life expenses

First and foremost, make sure you can afford to cover your basic necessities. With millions of Americans out of work and many still waiting for their unemployment to kick in, people are struggling to put food on their tables. Most financial experts agree that it’s best not to make any long-term plans for stimulus money until you can comfortably cover everyday expenses.

If your income has diminished or stopped during this crisis, it’s a good idea to take a step back and make a plan. It can be helpful to reconfigure an existing budget to better suit your new circumstances. Re-prioritize your bills, and remember—some of your living expenses like gasoline, gym memberships, or other subscriptions might be cheaper (or unnecessary) at this time. As always, basic necessities, such as food and critical bills, should be prioritized.

Build up your emergency fund

If you’ve already got your basic needs covered, it’s time to start looking at long-term solutions for your stimulus money. An emergency fund might be the best choice.

Rick Hoskins, a financial advisor on behalf of Tulsa Federal Credit Union, recommends calculating at least three-to-six months of expenses. This is the typical timeframe it may take someone to find a new job or career.

When calculating how much to save for an emergency fund, it’s ideal to create a robust budget that takes into account everyday living expenses as well as essential costs. That way in the event of a disruption to your income (whether for employment, health, or other reasons) you’ll be ready.

If you already have an emergency fund and you have needed to tap into it due to the pandemic resist the urge to spend this money on anything that isn’t an absolute necessity. As tempting as it might be to spend it immediately save what you can from your stimulus check to supplement what necessities unemployment can’t cover. The same goes for tax refunds. Both are a chunk of money that can go a long way to float you and your family if used conservatively.

“Tax returns and stimulus money are being sent out right now,” Hoskins said. “Make sure the federal government has up-to-date information for you, including your direct deposit information to speed up your deposits.”

Pay down high-interest debts

When deciding what debts or bills to pay first, it’s a good idea to consider all of your options at this time. If you are getting by on less income than usual, you can consider whether any of your payments could be delayed.

Student loan payments are less of a priority than they once were due to federal relief efforts and other institutions like your car insurance, large creditor, or other financial institutions may be willing to work with you on new payment options.

Once you’ve exhausted your relief options, paying down higher-interest debt first can help you avoid losing too much ground on saving.

Boost your savings

If your emergency fund is already full and you’ve made headway on your debt, it can be a good idea to use some of the stimulus money to add to your savings account. Even better, a Money Market account could give you a higher return while still giving you the ability to withdraw funds as needed for emergencies while protecting your money in the event of a market crash. Like all savings accounts at Tulsa FCU, our Money Market accounts are NCUA insured up to $250,000.

No matter what account type you choose, the money in your savings can be used to cover long-term financial goals, such as funding a dream vacation or covering the down payment on a new home.

Consider all your options before choosing how to spend your stimulus money. In all likelihood, this will be a one-time payment received during the pandemic.

What if I received a check for a deceased person?

The IRS updated its FAQs about the stimulus checks going out to Americans with more information on what to do if you receive a CARES Act check for someone who is deceased.

Anyone who receives a CARES Act “Economic Impact Payment” money intended for someone who is deceased must return the check to the IRS.

If you received the payment as a paper check:

  1. Write “VOID” in the endorsement line on the back of the check.
  2. Mail the voided check immediately to the appropriate IRS location.

    Those in Oklahoma should send to the IRS office in Austin:
    Austin Internal Revenue Service
    3651 S Interregional Hwy 35
    Austin, TX 78741

  3. Don’t staple, bend, or paper clip the check.
  4. Include a note stating the reason for returning the check. 

If you received the payment as a paper check and you have cashed it, OR if you received the payment as a direct deposit:

  1. Send a personal check or money order immediately to the appropriate IRS location.

    Those in Oklahoma should send to the IRS office in Austin:
    Austin Internal Revenue Service
    3651 S Interregional Hwy 35
    Austin, TX 78741
  2. Make the check/money order payable to “U.S. Treasury,” write “2020EIP,” and the taxpayer identification number (social security number,  or individual taxpayer identification number) of the deceased recipient of the check.
  3. Include a brief explanation of the reason for returning the EIP.

The new instructions do not indicate what the consequences are or will be for failing to return stimulus money sent to a deceased relative and the IRS has not commented on possible penalties yet.

The instructions the IRS released Wednesday don’t say whether people will face consequences if they fail to return stimulus money sent to dead relatives. The IRS did not respond immediately to a request for comment on possible penalties.

Note, these return instructions also apply for recipients who are incarcerated or are a “non-resident alien,” according to the IRS. Recipients whoa are green card holders, known formally as “legal permanent residents” are still entitled to the payment.


This article is for educational purposes only. Tulsa FCU makes no representations as to the accuracy, completeness, or specific suitability of any information presented. Information provided should not be relied on or interpreted as legal, tax or financial advice. Nor does the information directly relate to our products and/or services terms and conditions.