The First Money Moves You Should Make With Any Future Stimulus Payments

Stimulus checks are the government’s way of encouraging consumer expenditures when the economy has been slow, stagnant or in a recession. While it’s hard to predict when or if stimulus may be forthcoming, a change in presidential administrations can have ripple effects on the economy.

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The last stimulus checks to hit Americans’ bank accounts were during the slow downs of the pandemic, so while new checks may not be immediately underway, you never know when things could take a downturn.

When the government issues a stimulus check, it can feel like “free money” because you didn’t count on receiving it, which makes it very important to stop and consider what you plan to do with that money so it doesn’t go to waste.

According to Christopher Stroup, a financial advisor and founder of Silicon Beach Financial, here are three moves you should consider “first” based on your financial situation if any future stimulus payments come your way.

Most people carry some amount of debt, from car loans to credit cards. In fact, according to The Federal Reserve Board, 47% of adult credit card holders carried a balance for more than a month in 2023. The average credit card debt varies from state to state, but Connecticut led (and not in a good way) in the third quarter of 2024, with the average person holding over $9,300 in credit card debt, according to Lending Tree.

All debt can potentially be problematic, but it’s the high-interest kind that really holds you back.

“The first thing you should do with a stimulus payment is pay down high-interest debt. This can immediately relieve financial pressure and help you save on interest that can pile up over time,” Stroup said.

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If you are in a good place with debt, then the first move you should make with extra money is to “prioritize setting aside money for an emergency fund,” Stroup said. While opinions vary on how much you should keep in such a fund, a good rule of thumb is three to six months’ worth of your living expenses. These include the non-negotiables that you need to live, such as:

If you’re ready to build or add to your emergency fund, Stroup recommended you choose a high-yield savings account, if you can, an ideal type of account for storing these funds securely because they earn interest above and beyond a traditional savings account.

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