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7 ways to spend your $1,400 stimulus check and get the most bang for your buck

If you're not sure how to spend your stimulus check, here are some suggestions.

Oscar Gonzalez Former staff reporter
Oscar Gonzalez is a Texas native who covered video games, conspiracy theories, misinformation and cryptocurrency.
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Oscar Gonzalez
4 min read

How will you spend your stimulus check money? We have some recommendations.

Sarah Tew/CNET

The stimulus checks going out now (how to track your payment) are the largest of the three economic impact payments, at a $1,400 per person maximum for qualified adults, and an extra $1,400 per household dependent. These additional stimulus payments are part of President Joe Biden's American Rescue Plan, which also provided more unemployment benefits, an increase to the child tax credit and other tax breaks for Americans. 

With the money in hand, the question is what to do with it. We have some suggestions on what you could use the $1,400 stimulus check for. If you already used your stimulus check money, but think you're getting a child tax credit payment for up to $3,600 per child, these suggestions also apply.

Pay your most urgent needs first

The first priority is going to be whatever is vital for you to live. Buy some groceries, supplies for the family or pay for your housing. If that's covered, then work on your bills. Prioritize what accounts to pay and try to get current. Make sure utilities are up to date so that the light, water and heat stay on. 

While this $1,400 may not take care of every financial obligation you may have, it can help to give you more time if you need it. Keep in mind that the eviction moratorium has been extended, and depending on your situation, you could have a tax return coming thanks to the expansion of the child tax credit as well as the $10,200 tax exemption for unemployment benefits.  

Put some money aside to help pay your 2020 taxes

Speaking of taxes, Tax Day is April 15, although the IRS is reportedly planning to delay it by a month. This would give more time for tax filers to make use of the benefits in Biden's American Rescue Plan

Two provisions in the plan that will be a big help are the child tax credit expansions and the unemployment benefits tax exemption. Families can receive a credit on their taxes of up to $3,600 a child as long as the family makes less than $150,000 a year. Those who were out of a job last year and received unemployment insurance can exempt the first $10,200 on their taxes. 

Both can save taxpayers money, but if you still owe, the $1,400 will help take care of that tax bill. 

Watch this: Stimulus check 3: How much money you'll get

Pay off your credit cards and debts

One way to secure your financial future is to reduce your debt. A significant payment made to pay down a credit card and loan will help reduce the amount of interest paid on an account carrying a balance. The less interest you have to pay, the more funds you'll have available in the future. But before you do that, check with the debt holders because some are offering relief, including deferred payments and waived interest. Just be sure to read the fine print, as some of the assistance offered could delay interest rather than forgive it. 

If you're wondering how to prioritize your debt, there are two options to consider: the snowball method and the avalanche method. 

"With the snowball method, you eliminate debts one by one, starting with the smallest. This method is motivating as you can knock down the small debts first and it helps you build momentum, however, you'll end up paying more interest if your highest-balance cards also have the highest interest rates," said Trina Patel, financial advice manager at Albert. "And with the avalanche method, you pay the debts with the highest interest rates first while still paying the minimums on all other cards. This method is great if you are looking to save the most on interest charges."

Watch this: Child tax credit: Everything we know

Create or add to an emergency fund

It can't be stressed enough how important it is to have an emergency fund. As this pandemic shows, the world can change very quickly. The fund should be equal to the amount of money spent on expenses for three to six months. The $1,400 likely won't cover that amount, but it's a good starting point. An ideal place to keep the money is a savings account where it's easily accessible. 

Now if you had to dip into your savings account in the past year, it's time to rebuild. 

"You want to make sure you are positioning yourself to get back on your feet quickly when the economy starts improving. This means cutting down on unnecessary purchases and building a cash buffer of 3-5 weeks of expenses," said Corbin Blackwell, a financial planner at Betterment

Once you get some breathing room then it's time to build back those savings up again. 


Extra money doesn't come around often. We suggest you use it wisely.

Sarah Tew/CNET

Open a long-term investment account for a child

Part of the relief package provides additional money per child. If your family is already comfortable, there's a way to make use of that money to help your kids' future. 

"Provided you don't need this money, consider opening a 529 plan for your child," said certified financial planner Marguerita Cheng. "Your state may offer a tax benefit. This money can grow tax-free. If appropriate, you can even contribute modest amounts of, say, $50 to $100 regularly."

To start a 529 plan, contact your bank or investment firm to see what they have available and what benefits will come your way if you open one. 

Invest in you for the long term

The $1,400 stimulus payment can be a great starting point for an IRA or other long-term investments. By letting that money grow and contributing a bit each month, you could have a nice nest egg by the time you retire. 

Gift some to those in greater need

Those fortunate enough to find themselves not needing any of the money for themselves should consider giving it to people who do. There are many charities still fighting the pandemic, such as food banks and hospitals. Another consideration is to help out friends and family members who've been hit hard by the pandemic. 

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