How to Prepare and Spend Your Government Relief Check

While you may have to wait for the money you may be entitled to, now is the time to get your finances and plan ready. The best use of this money depends on your personal situation. Here’s how to think about it.

DO THIS PREPARATION WORK, Whatever your situation

Now is the time to take a look at your financial situation and save money, if possible. The fallout from the pandemic could continue for some time. Taking small steps can help you feel more independent and less stressed.

First, take stock of your current expenses, such as housing costs, car loans, and credit card payments or other debts. A budget spreadsheet can help put everything into account and show what goes to needs, wants, savings, and debt. Once you see the big picture, consider trimming where you can due to the current uncertainty.

“We’re all operating on limited cognitive load right now,” says Kristen Holt, CEO of nonprofit credit counseling agency GreenPath Financial Wellness. “Writing everything down and thinking about it before spending any money would be a good idea.”


Those who have lost their jobs may feel like the ground has collapsed beneath them. Government money will provide a much needed boost, but it may take weeks or even months before you get it. And you will probably need to top it up and stretch it.

“The amount of those checks is not going to go very far to pay people’s regular bills,” says Carol Fabbri, director of Fair Advisors, a Colorado-based financial planning firm. “They need to cut their bills as much as possible, then think about Maslow’s hierarchy of needs – you need to eat, you need shelter – and focus your spending on that.”

In this spirit:

TAKE ADVANTAGE OF ALL SOURCES OF HELP: Pick up the phone and call your creditors. Explain your situation and find a way to delay payments for a few months or set new minimum payments. Given the unprecedented nature of this moment, many creditors are offering ways to make payments more manageable for consumers. For homeowners, there are mortgage assistance programs you can use if you can’t pay your mortgage.

Explore the resources to help you manage and minimize expenses. File an unemployment claim if you are eligible and use all the resources your former employer can offer. By calling 211, you will be put in contact with local health and social service organizations.

MAKE A PLAN FOR THE MONEY YOU GET: Focus on necessities, like shelter and food, to make sure your basic needs are met.

If you have anything left, you might be tempted to throw that money into debt. But saving should be a priority now, says Diane Pearson, financial advisor at Pearson Financial Planning in Pennsylvania.

“We don’t know how long this situation might last and that money might be needed later,” says Pearson.

IF IT’S STILL NOT ENOUGH: For many people, this money will not cover all of their expenses, even after using all government and nonprofit resources. In this case, accumulating debt to cover expenses may be an option of last resort, but can be done strategically. Many of the “rules” regarding the use of credit cards do not currently apply.

“If you’re going to go into more debt, do it with a plan and make sure you use the best options available to you,” says Holt. “Don’t assume there are no options.” She suggests exploring the lending options of local credit unions, for example, and avoiding high interest loans like payday loans.


For those who still have a regular income but not much in the bank, a government payment is a chance to build financial resilience.

BUILDING SAVINGS: If you don’t have an emergency fund or if you’ve already run out of it, creating one with that government money would be a good idea.

“An emergency fund is more essential right now than it has been in our entire life,” says Fabbri. “We are all vulnerable in this economic situation.

Fabbri suggests putting your money in a high yield account, like an online savings account, so you can earn more interest than a traditional checking account.

Designate your emergency fund for just that – a lack of cash. The economic impact of the pandemic is likely to last, so save some cash as protection against the headwinds you encounter.


If you are still employed and have emergency funds, consider yourself lucky. If you qualify for a government payment, consider using it as a stimulus, not a relief. Consider donating to charities – avoid scams by navigating directly to known and trusted organizations – or sponsor small businesses that are suffering.

“If you are in the lucky place where you have already protected yourself, then this is a wonderful time to give,” says Fabbri. “Get a gift certificate for a nail salon or restaurant you usually go to. If you can afford it, this is a great way to support your community.


This article originally appeared on the NerdWallet personal finance website. Sean Pyles is a writer at NerdWallet. Email: [email protected] Twitter: @seanpyles.

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