The Senate-amended third stimulus bill passed in the House of Representatives for a second time by a 220-211 vote, with all Republicans and just one Democrat voting “nay” on the measure. President Joe Biden made the package law with his signature on Thursday, March 11.
The bill includes $1,400-per-taxpayer and $1,400-per-dependent stimulus checks as well as higher child tax credits. It also extends unemployment benefits that were due to expire on March 14, 2021. Out-of-work Americans will continue to receive $300 per week in unemployment compensation through September 6. Plus, households making less than $150,000 will qualify for an income tax waiver on the first $10,200 in unemployment compensation they received in 2020.
With the stimulus checks on their way, let’s explore when you may get yours and ways you can put it to use.
When to Expect Your Stimulus Check
With the stimulus bill officially signed into law, the Treasury department can start doling out the payments. But there is still some lingering uncertainty as to when you’ll see your check or direct deposit.
On March 11, White House Press Secretary Jen Psaki added some clarity and relief when she said, “People can expect to start seeing direct deposits hit their bank accounts as early as this weekend.” Psaki quickly added this is just the first wave, and payments are expected to go out over the next several weeks.
Those who have direct deposit set up with the IRS will likely be the first to get their payments, followed by those receiving paper checks in the mail. Folks who will receive the EIP cards — prepaid debit cards — will probably be the last to get their money.
What to Do With Your Stimulus Check
Under the new bill, a family of four could receive a $5,600 check in just a few weeks. You may be wondering, “What should I do with my check?” Here are a few options.
Pay Living Expenses
If you’re one of the millions of Americans still out of work due to the COVID-19 pandemic, this check can go a long way toward keeping your head above water. You can use this check to catch up on or get ahead on your basic living expenses, including rent, electricity, water, groceries, and more.
Pad Your Emergency Fund
If you haven’t built your three- to six-month emergency fund yet and are still gainfully employed, you can use this sudden cash injection to build your savings. You could put the cash into a high-yield savings account and let it sit.
Not only will this give you quick access to cash if an emergency strikes, but it’ll also grow over time.
Pay Down Debt
You might also consider using this large financial influx to pay down debt. It’s not often you come into thousands of dollars in one shot, and you can use it to make a big dent in your principal balances, which will save you on interest in the long run.
For example, if you have a $10,000 personal loan on a 10-year term at 8% interest, paying an extra $1,400 this month can save you over $1,700 in interest and allow you to pay off the debt two years faster.
Finally, if you are debt-free and have a fully funded emergency fund, padding your retirement savings by investing the money might be a good option. The magic of compound interest could turn that stimulus into quite the hefty sum.
For example, if you put $1,400 into the stock market and earn a modest 7% average return, that $1,400 has the potential to grow to over $5,600 at the end of 20 years.