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“How Should I Spend My Stimulus Check?” (A Question Worth Answering!)

“Hey Derek…How should I spend my stimulus check?…” It’s a question that many of my friends are asking me these days. 

  • Their jobs are pretty stable
  • They don’t really need to pad their emergency fund anymore
  • But, they’re also not really sure they want to invest the money given the stocks are at an all-time high…

So what would I do if I were them? What would I do with the stimulus money?

It’s a great question, and it’s definitely worth answering!

Related: What Is The Impact of the 2021 Stimulus on Your Taxes?

how should I spend my stimulus check

We’ve Received Three Stimulus Checks…What We’ve Done With Them

Before I give any kind of advice to anyone else, I feel the need to put myself in their shoes – to actually try to feel what they’re feeling before I give them any kind of advice. 

And, with the talk of stimulus, I don’t have to imagine all that hard because my wife and I have actually received some stimulus checks – we have qualified for all of them actually.

Here’s a quick run-down of what we’ve received and what we’ve done with the money.

The First Stimulus Check — $3,400

The first go-round of stimulus payments were $1,200 per adult and $500 for each child. Therefore, between my wife and I and two young kiddos, we got our first payment of $3,400 back in April of 2020. 

At the time, my work was cut back to 90% of full-time, but we felt my job was pretty safe and we had $25,000 in the bank for our emergency fund. So, we really didn’t need the money in our savings account.

Also, at that time, the stock market was unbelievably low — like 30% below where it was just a couple months’ prior. 

So, we stashed the money into VFIAX, an S&P 500 Index fund that moves up and down with the market.

Today (just one year later), that $3,400 has increased in value by 77% and is worth about $6,000.

I’d say that investment was a good move!

The Second Stimulus Check — $2,400

The second stimulus checks were $600 per person, so we got another $2,400. That was back in December, 2020.

We didn’t have any grandios plans for that money, other than just putting it into our checking account right before we left on our vacation to Florida. Honestly, we probably spent half of that money in Florida (no regrets!!) and half is still sitting in our checking account.

We got a little sloppy with that one…Not totally proud of it, but that’s the truth of the matter! 😉

how should I spend my stimulus checkThe Third Stimulus Check — $5,600

Whoa, now this is starting to feel like some real money.

I’m back to working full time, we’re doing great financially, and now we’re going to receive $5,600 for basically no reason at all?? (To my kiddos, if you ever read this and income taxes have been jacked up to 50%, I apologize for our nation’s loose pocketbook that you’re now paying for…).

Anyway, it was time to make a bit of a plan for this money.

  • The stock market is back to its all-time high, so investing the money into the market isn’t a slam-dunk decision anymore
  • Real estate prices are through the roof, so we’re not going to invest any of those funds toward a rental property
  • And, it’s just too big of an amount to piddle away!!

So…how are we going to spend this stimulus check??

Essentially, it’s going to help us fund a few different things.

  1. We’ve got a great deal brewing on a mini-van. We can get a 2013 Toyota Sienna for $9,200 (it retails for $13,000-$14,000), and it will last us for a long time, so I think we’re going to jump on it. We can sell our current van for $6,200, so $3,000 of the stimulus is going toward this van upgrade.
  2. We could use at least a grand more in our kids’ private school investments to make sure we don’t run out toward the end of their schooling. So we probably will put $1,000 into our Vanguard VFIAX index fund investments
  3. And, finally, we’re very close to starting a new addition on our existing house – a master bedroom suite over the garage! Another grand or so will help with some of those unforeseen overages that are bound to happen!!

All in all, we’re spending the money. And mostly on fun stuff actually!

How Should I Spend My Stimulus Check? The Answer to Your Question

So what about you? Where are you at financially?

If you’re asking the question, “How should I spend my stimulus check?” Take a look at the various options below that I’d recommend!

(FYI – All the suggestions below are in alignment with my “15 Steps to Winning Financially” – follow the link for this amazing free resource!!)

1) Behind on Bills? Get Current.

If the pandemic hit you hard and you’re behind on utilities, rent, food, or car payments, use this stimulus to get back on your feet. There’s nothing more important than your four walls, and you simply can’t stop paying for things that are needed to survive. 

2) Build Yourself a Savings Buffer

I was counseling a guy that was digging his way out of debt when the pandemic hit.

He asked me what he should do. 

I told him to stock up a bunch of cash…just in case he lost his job. It wasn’t worth the risk of paying down a bunch of debt given the uncertain times. 

If you feel like you’re in a vulnerable spot and you could potentially lose your job, stash the cash baby. Don’t invest it, don’t pay down debt, just put the money in savings and leave it there. If something does happen and you lose your job, you certainly won’t be upset with a pile of cash sitting in the bank!

3) Put the Money Toward Your Consumer Debts

Now, if you’ve been working all throughout the pandemic and there’s pretty much no chance of you losing your job, then by all means, take this stimulus payment and slap it on your debts and wave goodbye to them on the way out. See ya, sucker!! (That’s what I’d say anyway 😉

Related: How the Debt Snowball Really Works (FREE Tool included for YOUR debt snowball!)

4) Build Up a True Emergency Fund

Have you already ditched all your debt? Ready to beef up your emergency fund to a true 6-month stash of cash? Then use this stimulus to do that!

It’s certainly not sexy, and it’s not exciting at all, but it’s a quick way to build up your emergency fund! 

5) Put It Toward Your Home Mortgage

Let’s say you’ve already paid down your consumer debt and built up your 6-month emergency fund. Now, you’re investing 15% into your retirement accounts and using all of your excess money to pay down the mortgage. 

What should you do with your stimulus money?

The answer is actually pretty simple…

Put it toward your mortgage! Right to the principle! Man, that’s going to feel good!

Related: How to Pay Off Your Mortgage Faster!

6) Invest for the Future

Are you still beyond the point of the first five suggestions? Well then daaannnnnggggg, you’re a stud (or you know…a stud-ess for all you ladies out there)!!

You’ve already…

  • paid off your consumer debt (student loans, credit cards, medical bills, car loans, etc.)
  • built up a full emergency fund
  • and paid off the house!

So now what do you do? How should you spend that stimulus check?

Well, while you are mortgage free, it still probably wouldn’t hurt to invest those dollars for your future.

So…where should you invest?

First, I’m a bit hesitant to put a bunch of money into the stock market given they are at their all-time highs right now, but I am personally putting a few more thousand dollars into VFIAX (the Vanguard S&P 500 index fund that I mentioned earlier). It’s just such a simple investment, and the market could still jump quite a bit in 2021 with everything opening up again. 

Second, if you have a business that you’ve been wanting to get started, now could be the time to make that a reality. Use that stimulus check for your base of materials, start working your butt off, and see what kind of revenue you can earn!

Finally, if you can find a decent price on land, that’s never a bad investment. In fact, it’s the one thing that man can’t produce and there’s less and less of it per capita with each passing day (although Elon Musk is trying to expand real estate dramatically these days ;))!

We currently have 6 acres of land. If we had the chance to add to that, I’d literally jump out of my chair to make the deal. 

Related: Where to Invest Your Money in 2021

7) Spend It And Have Some Fun!!

Are you completely out of debt?

Do you have a ton of money in your emergency fund? And in your retirement?

Then I give full permission to do whatever you want to do with your stimulus money!

  • Upgrade your car
  • Get a boat
  • Buy some nice clothes
  • Or, give a bunch of it away if you want!

Whatever you feel like doing with the money, go for it! You’ve been diligent with your finances for many years. You’ve earned this!

Related: How Much Should I Have In Retirement at 35?

“How Should I Spend My Stimulus Check?” What’s Your Answer?

So what is it for you? How should you spend your stimulus check?

Are you…

  • paying down debt?
  • putting money into savings?
  • paying down your mortgage?
  • investing for your future?
  • or are you just blowing the money on anything you please?

I told you what our plans are. Upgrading our van, putting some money into our kids’ private school fund, and putting the rest toward our house addition. 

What will you do with your stimulus? And why? Tell us in the comments below!

Grow Rich Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. We put the original stimulus toward our 2021 estimated taxes and will do the same for the one coming up. That didn’t take all of it so I think the rest went into our investment account. We’d liquidated s good chunk of our investments in anticipation of the stock market going down. When it showed signs of starting to recover, we jumped back in and loaded up on some nifty dividend paying stocks and interest paying bonds. Oh, and we handed out a few really really nice tips to our loyal delivery drivers who gave us fabulous service during the lockdown period.

    • I like the idea of nice tips to the delivery drivers! We’ve depended on them a lot during this lockdown as well! I’ll have so etch out a few dollars for that.

      Good to hear from you, Kathy!

  2. I posted that we are doing a refi and planned to put the money that we save towards the principal. We don’t have a lot invested for retirement in about 5 -6 years. Do you think it still makes sense to put towards the mortgage or invest more in index funds, considering the market? Thanks!

    • Great question, Carlyn. Typically, it’s best to do a combo approach — to put 15% of your income toward investments, then tackle the mortgage aggressively with any funds you have outside of that. How quickly do you think you can pay off the mortgage? If it’s 1-2 years, I’d stick to that approach. If it’s longer, I might be inclined to load up money in your retirement accounts since you’re only 6 years out from that.

      Regardless, you’ve got to figure out how to make loads of money, and quickly! Maybe this post will help?

      • Thanks, Derek!

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