Spending Your Stimulus Check? Pay Yourself First
Stimulus checks are hitting bank accounts, and many people already have plans for their money. But before you start spending, first take a closer look at your savings.

The $2.2 trillion CARES Act is the largest emergency relief package in American history. It includes a one-time direct payment to an estimated 93% of taxpayers. Even those receiving Social Security benefits are eligible for a check, even if they haven’t filed taxes in the past few years. The money started hitting bank accounts in mid-April, with paper checks close behind.
Individual filers with adjusted gross incomes less than $75,000 a year will receive $1,200, plus an additional $500 per dependent child under age 17. That amount phases out for those making between $75,000 and $99,000. For married couples filing jointly, they would get $2,400 for adjusted gross incomes up to $150,000, with the check amount phasing out between $150,000 and $198,000. (To find out how much money you'll get, use our Stimulus Check Calculator.)
While the hope is that people spend this money and stimulate the economy, there are a few things you can do to benefit your financial situation now and in the future.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Open a Roth IRA (or add funds to an existing Roth)
Consider using your money to open a Roth IRA to help diversify your tax liability in retirement. Because you won’t have to pay income taxes on your stimulus check, it’s essentially free money to put in a Roth IRA. Other contributions you make to your Roth will be taxed, but your account grows tax-free and you can withdraw it tax-free in retirement.
A Roth IRA can make a big impact on your overall tax situation in the future. Your taxes in retirement are based on your overall income, and your Roth IRA withdrawals don’t count as income. This means your Social Security check and other income in retirement could be taxed at a lower rate. You can save up to $6,000 in your Roth IRA in 2020, and up to $7,000 if you are 50 or older.
If you don’t have a long-term financial plan, now is the time to meet with a financial adviser who can help you set savings goals for retirement and create a plan to reach them.
Eliminate Debt
Household debt is at an all-time high with Americans owing more than $14 trillion. Use this money from the government to tackle your debt. There are two popular methods:
- The avalanche method encourages you to tackle the debt with the highest interest rate first.
- The snowball method encourages you to pay off the debt with the smallest balance first.
With each method, continue making at least the minimum payments on your other debts as you work to pay it all off. The money you’re receiving now can help you chip away at what you owe.
I recommend eliminating debt before you enter retirement. Any debt payments need to be worked into your retirement spending plan, and eliminating those payments now will help your money last longer in retirement.
Boost Your Emergency Fund
Half of people expect to live paycheck to paycheck this year, and more than half don’t have enough saved to cover three months of expenses. If you’re concerned about being laid off in the near future, take the stimulus money you receive and start an emergency fund. Your emergency fund should have enough money to cover three to six months of expenses if you were to lose your job, miss a paycheck or face an unexpected medical bill.
An emergency fund is a key piece of financial security no matter your age — but it’s especially important in retirement when you’re living on a fixed income.
As unemployment reaches record highs, many people will need this money from the government to make ends meet in the coming weeks. However, for those who are financially secure right now, investing in your future is a move you won’t regret.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Tony Drake is a CERTIFIED FINANCIAL PLANNER™ and the founder and CEO of Drake & Associates in Waukesha, Wis. Tony is an Investment Adviser Representative and has helped clients prepare for retirement for more than a decade. He hosts The Retirement Ready Radio Show on WTMJ Radio each week and is featured regularly on TV stations in Milwaukee. Tony is passionate about building strong relationships with his clients so he can help them build a strong plan for their retirement.
-
Amazon Ends Free Shipping Benefit Sharing with Non-Household Members
Starting October 1, Prime members will no longer be able to share shipping perks with those outside their household.
-
Big Tech Names Rise Above Broad Weakness: Stock Market Today
Some familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
More Than Money: The Hidden Toll of Financial Abuse of Older Adults
Financial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your Dollars
The world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
The Unsung Hero of Aisle 5: A Tale of Forgotten Change and Compassion at the Supermarket
This supermarket manager went above and beyond to help when a child forgot her change at the checkout counter. You might be surprised at some of the complications that supermarkets face when it comes to customers' forgotten change.
-
Train, Integrate, Retain: A Strategic Playbook for Adviser Onboardings
Build a thriving practice by training new advisers with clear goals, structured processes and consistent mentorship for strong team growth.
-
I'm a Financial Professional: Here Are Four Ways You Can Use Debt to Build Wealth
Using debt strategically, such as for homeownership, education and more, can lead to greater financial stability and growth.
-
Five Key Wake-Up Calls for Ambitious Business Owners, From a Biz Specialist
Your personal financial plan needs to include a formal exit strategy for your business, or you could be in trouble.
-
I'm a Retirement Psychologist: Here's Why Doing What You 'Ought' in Retirement Beats Doing Whatever You Want
True retirement freedom isn't about simply doing whatever you want, but about finding purpose and direction through commitments that align with your deepest values and allow you to contribute meaningfully.
-
Tactical Roth Conversions: Why 2025-2028 Is a Critical Window for Retirees
The One Big Beautiful Bill (OBBB) extended today's low tax brackets, but they may not last. Here's how smart planning now can prevent costly tax surprises later.