The 3 Worst Ways People Will Use Their Next Stimulus Check

The 3 Worst Ways People Will Use Their Next Stimulus Check

According to Suze Orman  By  Sigrid Forberg  Sat, February 6, 202

 President Joe Biden’s plan to give Americans a third round of stimulus checks — for as much as $1,400 — is now in the hands of Congress, and House Speaker Nancy Pelosi said in a statement on Friday that final approval could come by the end of February.

That could give you a fresh payment in early March. Personal finance icon Suze Orman wants you to start thinking now about what you'd do with new COVID relief cash. She says there are right ways and wrong ways people have been using their stimulus checks.  Her general advice on the topic is to think "right now" and think long term and think of others. More specifically, Orman says avoid these three common stimulus check mistakes.

1. Not taking care of bills first

Orman tells Yahoo Finance Live that when Americans receive stimulus money, they should use it to pay bills first.

That may sound obvious, but some people don't prioritize. If money is tight or your income is uncertain, don’t focus on paying down your debts with your stimulus check, Orman says. In a recent CNBC interview, she recommended sticking with the minimum payments on credit cards, for now.

Though overall credit card debt plunged by 9% last year, according to the credit bureau Experian, many people have been relying on their plastic more heavily, just to get by. If that sounds familiar, consider rolling your balances into a more affordable debt consolidation loan at a lower interest rate.

Make sure all the big expenses that you must pay are settled: your rent or mortgage, any car payment, auto insurance and student loans.  Note that car insurance companies have been cutting their rates because people have been driving less during the pandemic. If your insurer won’t give you a break, shop around and compare rates to find a better deal.

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https://finance.yahoo.com/news/worst-ways-next-stimulus-check-154400568.html