DETROIT (WXYZ) — As the economy is taking a hard hit, personal finance expert Andy Hill is sharing some solid advice on how to spend your stimulus money so you don’t fall behind.
“There’s a lot of people right now that are unemployed, laid off or furloughed or even just have their hours cut,” Hill said.
“Most people live paycheck to paycheck and when that paycheck disappears, that’s a serious matter,” said a Wyandotte soup kitchen volunteer.
But Hill says there’s nothing wrong with spending money right now.
“Making sure your family’s fed, making sure you are fed and making sure you are staying healthy, so we can get through this crisis,” Hill added.
Your next priority should be to pay your mortgage or rent. A lot of landlords and banks are offering a forbearance, but that doesn’t necessarily mean you should defer the payment.
“You’re going to have to pay those eventually, so don’t delay if you have the money,” Hill said. “Pay your utility bills. These are the things you should be doing with your money first."
On the flip side, if you are fortunate enough to still be working, don’t treat it as a bonus.
“It might be a good idea to take some of that stimulus money and use it to throw into your emergency savings,” Hill said.
“Typically, it’s really good to have at least three months of expenses in an emergency fund,” he said.
Three months at the least, but a six-month emergency fund should also be considered.
“The whole point of this, again, is to stimulate the economy," Hill said. "To get things moving."
Since we don't know how long this health crisis will last, it's important to stay prepared financially.
“We all don’t know what’s going to happen with this crisis right now," Hill said. "This could continue for a long period of time."
Here’s the Rebound rundown:
- take care of your financial needs first
- don’t defer payment on your rent, mortgage and utilities
- and if you can, build out a 3 to 6-month emergency fund, that could support you through a recession.
For all of us, it’s a great time to sit down and take a fresh look at our expenses. Make smart budgets so we can get through this and potentially come out better on the other side.