The federal government’s COVID-19 stimulus payments have begun appearing in bank accounts this week, with taxpayers receiving as much as $1,200 per individual or $2,400 per married couple, as well as $500 per minor child. But what should taxpayers do with influx of cash? The New Jersey Society of CPAs has some suggestions.
The organization issued a news release Wednesday detailing its recommendations for effective use of the money during the pandemic, which has left many people unemployed or otherwise affected financially.
They include, in order of priority:
- Pay essential expenses: The CPAs advise being strategic and taking into account any other forms of relief, prioritizing bills including housing, food and medication, as well as utilities.
- Boost emergency funds: Having three to six months’ worth of expenses in the bank can offset emergencies such as layoffs.
- Pay down high-interest debt: Credit cards may be accumulating more in interest than people might earn by saving the money in the bank, for instance.
- Fund a retirement plan or Health Savings Account: The extension of the federal tax filing deadline also extends the time to make contributions for the 2019 tax year, the CPAs said.
- Contribute to charity: If a taxpayer is fortunate enough to not need the money for any of the above, a donation could help organizations fighting the effects of coronavirus, such as food banks.
