By now, you have probably gotten your third stimulus payment. If you haven’t received any of your stimulus payments, you may be able to claim them when you file taxes. But if you have, think long and hard about how you want to spend the extra money. This is an excellent opportunity to upgrade your financial preparedness.

Here are four ways to use your stimulus.

Pay Off Debt

Americans have a lot of debt. Data from the Federal Reserve Bank of New York’s Household Debt and Credit Report shows that the average American has $51,900 in debt. The average amount of credit card debt is $2,980 and the average amount of debt from sources like personal loans and payday loans is $1,520.

Some types of debt are worse than others. If you have debt with a high interest rate – like credit card and payday loans – paying it off as soon as possible can save you a significant chunk of money in the long run.

Buy Insurance

Many people who are doing OK financially now are only one illness or injury away from financial ruin. Various insurance products can protect against this threat. Here are four key types of insurance coverage to consider:

  • Life Insurance – This is a great way to make sure your loved ones are provided for no matter what happens. Life insurance can also provide various tax advantages. There are different types of life insurance products – including term, whole and universal – to meet your needs and budget.
  • Disability Insurance – This coverage can provide a source of income if an illness or injury prevents you from being able to work.
  • Long-term Care Insurance – Long-term care refers to non-medical care and assistance with basic personal tasks. This care is not normally covered by health insurance, and the ACL says that most Americans turning 65 will need long-term care at some point.
  • Health Insurance – Thanks to a new Special Enrollment Period created in response to COVID-19, people who are eligible for Marketplace coverage can enroll in a health insurance plan through August 15, 2021. It may also be possible to use this enrollment period to make changes to your plan selection.

Build an Emergency Fund

Many people are using their stimulus payments to cover urgent expenses, like rent or mortgage payments, utilities and groceries. If you’re lucky enough not to need the money for these expenses, keep in mind that your luck may change.

Building an emergency fund now means you’ll be prepared for the next rainy day. If you put your money in a savings account that earns interest, your savings will grow the longer you don’t need it.


If you don’t have debt and you already have an emergency fund and insurance coverage, consider investing. Many people have fallen behind on their retirement savings, and the pandemic has made this worse. Investing your money today could help you tomorrow.

There are many investment options, and a financial advisor can help you select one that’s a good match for your needs and risk appetite.

Need financial preparedness or insurance guidance? Reach out to the team at PTT Financial. We’d love to help.