Relief Bill: How should I use the money?

In late March, the U.S. Congress passed a $2 trillion economic rescue plan, dubbed the CARES Act, to provide relief to Americans impacted by the COVID-19 pandemic.

The bill included cash payments to individuals, increased unemployment insurance benefits, changes to student loans, and to retirement account rules, among others.

The amount of the payments varied by income, but most people fell into these categories: single adults with an adjusted gross income of $75,000 or less would receive $1,200, while married couples with no children who are earning $150,000 or less would receive $2,400. An additional $500 per dependent was also included. You do not have to pay income tax on the payment.

If you’re in a situation where you have a choice how to spend it (i.e. you’re able to use it for discretionary purposes instead of rent/mortgage/food), what should you do? Market Watch had some ideas after polling financial experts:

* Put it into an emergency fund account. A rainy day account should cover three to six months of expenses and some online savings accounts can offer annual percentage yields of 1.5 to 1.7 percent.

* Pay down debt. Experts recommend putting it toward high-interest debt like credit cards and waiting on student loans to see what might come of other relief efforts.

* Invest – but cautiously. True, some people can benefit from a quick flip. No one but a trusted investment advisor should recommend stocks. But, some ideas are equities, a long-term strategy; investing in companies like virtual learning, grocery stores, and Esports; or even an exchange-traded fund (ETF), which is a basket of securities that you can buy and sell through a broker.

* Donate. If you’re in a position to donate some of your payment, food banks, and other charities will need an influx for some time. Animal charities expect to be hard hit as their donors scramble to shore up their finances.