While there are several individuals in great need of the stimulus payments from the government for others it is a windfall. Likewise, tax refunds can be unexpected bonus income that you are not relying on for your regular expenses. So, what do you do with this money?
The obvious first answer is to pay down debt, especially high interest debt. Putting yourself in a healthier financial position is always a good choice.
The next logical choice would be to save for a rainy day. It is quite possible that over the difficulties this last year people have tapped into their savings. Additionally, if you borrowed/distributed money during the pandemic under the provisions of the Cares Act, replacing those funds, even in part, can help reduce any overall tax liability you may have. If these choices do not apply to you or after these options have been exhausted, give us a call. We are happy to discuss with you your options to save toward your future.
Making your money work for you is the best choice you can make. Putting away money in the bank is practically the equivalent of socking money away in a shoebox or under a mattress. Inflation will eventually nibble away at the value. Investing in stocks and bonds, while they carry risk, can vastly grow in value at a pace that makes your money work for you. As always, we would take a measured approach to your individual risk level and personal circumstances giving you peace of mind in using this tactic.
Lastly, remember that it is all about balance! Weigh your goals and your needs. This pandemic has been difficult, and you may have neglected some of your basic needs. Allow yourself to indulge in something that fills your emotional bucket or eases some of the pressures we have all been under. With that in mind, do so frugally and try to strike that perfect balance between the present and the future.