You get a check, you get a check, everybody gets a check! If you are a citizen of the United States the government wants to give you free money to help assist in this economic slowdown (but nothing the government does is ever free). The White House is asking Congress for a $1 trillion dollar (Yes, Trillion with a “T”) coronavirus relief and economic stimulus plan that would include industry-specific bailouts and payments to individual taxpayers.
As long as you filed your taxes in 2018 the United States government will just send it to you. The method of delivery is unclear right now. My guess is that it will be old fashion paper checks.
But before you cash your check you need to understand the hidden cost. If you don’t use it the right way you will be like those people who hit the lottery and a few months later they are “broker” (yeah I said “broker”) than they were before they won.
Your $1,200 checks are a part of a larger 1 Trillion Dollar Stimulus Package, designed to keep people a float so everyone doesn’t go broke. The proposal includes:
You have a lot of people out there that think that the government is giving them this money for free. But know that it’s coming at a high cost. The government requesting the Fed to print more money just provides a short term band aid for everyone but causes major inflation in the long term. You need to know where this trillion dollars is coming from. The government of the United States doesn’t have any money. The government is now borrowing that money from you, the taxpayer, foreign governments, and the Federal Reserve. Don’t be fooled, the Federal Reserve is not Federally owned and it says that itself. When the Federal Reserve prints money it devalues the price of the dollar.
It’s like toilet paper. Have you noticed before the Coronavirus pandemic everyone had toilet paper, but now that you can’t find any in stores, people consider it more valuable. Money is the same! All this money printing comes at a cost. The more money in circulation is the less each dollar is worth. How does this affect you? It’s called inflation. Prices of goods and services are about to rise. That’s why the prices of your rent, groceries, cars, insurance, and everything continues to go up. The US collects it’s money from taxes. You might see your tax bills go up because. Now people are paying more in taxes to pay off 1 Trillion dollar debt.
Listen clear, I know that it’s hard for people out there right now. But, I’ve said it before & I’ll say it again. Pumping money into the economy is only a temporary solution that will NOT solve the problem. This is the equivalent of covering a gunshot wound with a band aid.
That’s why you need to make sure you use your checks right away.
First make sure that your basic necessities are covered by prioritizing essentials like food, housing and utilities. If you don’t have an emergency fund, leave that money in a money market account. I know that dollars are becoming less valuable but you have to ensure that you have cash stacked back just in case this pandemic lasts longer than expected (which we don’t really have an end date). Cut your expenses and sell what you can and build your emergency fund in that way you are protected because the next few months have a big question mark over it. If you have high interest debt/high payment that you can knock out with a fraction of the money (not the whole amount). I would eliminate those bills during this time, but every situation is different, do your research and budgeting because making your decision.
If you are not at risk of losing your job and not worried financially. Inflation is coming and assets are on sale. You just don’t want to hoard cash because it will slowly lose money. More millionaires are made during recessions than any other time in the economy. It’s wise to invest your money in something that will grow with inflation. Just remember that investing has risk, you are not guaranteed to make money you might even lose money. That’s why I am encouraging you to do your homework and research before making a decision. There’s a chance that the stock market will fall a lot more, no one can predict where the bottom may be. But I can say the people that get hurt on a rollercoaster are the people that will jump off the ride. You want to invest in companies for the long term. Look at the 10, 15, and 20 year track record. You want to invest in a company that’s not worried about going bankrupt. I’m not offering financial advice so do your due diligence.