Today we are going to talk about the money from the government that may be coming to your checking account soon. We will talk about how much people are getting and if you get a refund, how you should be spending it.  How did we get here? The Coronavirus has caused massive impact to the economy. Unemployment rates have spiked to what is estimated to be about 10% of the US workforce and the thinking is that number will continue to climb in the coming weeks, especially if we continue to struggle containing the spread of the virus. To help assist with the overall impact, Congress passed an economic relief plan in late March worth over $2 Trillion of spending and bail outs. Included in the stimulus bill was the authorization of payments to individual Americans. For right now, this will be a one-time direct payment.

Not everyone will get these payments so let’s first talk about who is eligible and how much people will get. The plan provides $1,200 for each adult and $500 for each child under the age of 17. So a married couple with 2 children would start out by receiving $3,400 as a payment from the IRS. However, there is an income requirement as part of the eligibility that could mean you get a reduced payment or even zero. So let’s talk about how that works.

Your payment will be based on how you filed your 2019 taxes, or your 2018 filing if you haven’t yet filed for the 2019 year. If you filed as an individual and made less than $75,000 in adjusted gross income, you will receive the full $1,200. If you are an individual and make more than $75,000, your payment will be reduced by $5 for every $100 you make above $75,000. So for example, if your adjusted gross income is $80,000, your payment would be $950. If as an individual you make more than $99,000, you will not get a refund.

The eligibility is different if you are married and file your taxes that way. For married couples, the income threshold raises to $150,000 and any married couples making more than $198,000 will not receive any payments. The IRS will do the calculation and then send the payment to the banking account information they have on file for you. For most people that will be direct deposit and not a physical check, but, if the IRS doesn’t have direct deposit account information for you, they will launch a website in the coming weeks where you can provide than info. Check the IRS.gov website for updates. The hope is that payments start to go out in the next 2 to 3 weeks.

If you are getting a payment, you may be wondering what you should be doing with it. Well here are some tips for how to use this money to boost your personal situation.

Idea 1: Shore Up Your Basic Necessities

Idea 2: Feed Your Emergency Fund

Idea 3: Support Your Favorite Restaurant

Idea 4: Treat Yo Self

Try to find local businesses that still have online ordering or are taking orders over the phone with different ways to pick up or have your products sent to you. They need our help and you can still get something nice to use or wear at home.

There are times in life to be aggressive and times to be cautious. That is true for the risks we take with our careers and with our money.  Given all the unknowns in play, I’m going to be more cautious for now. We are all different and can handle different amounts of risk and stress. Now is a good time to reflect on how much risk you are willing to take and what that means for your budget, your investments and your emergency savings.