How to Prep for and Spend Your Government Relief Check – NerdWallet

  • March 27, 2020
  • By: Greenpath Financial Wellness

Excerpt from NerdWallet’s post on planning out your finances prior to receiving your government relief check.

Featuring Kristen Holt, President & CEO

The coronavirus pandemic has upended the lives and finances of millions. A federal relief package aiming to provide payments to distressed consumers is on the way — but that money is not likely to land for a number of weeks.

While you’ll have to wait for whatever money you might be eligible for, now is the time to prep your finances and plan. The best use of this money depends on your individual circumstances. Here’s how to think it through.

Do this prep work, regardless of your situation

This is the time to examine your money situation and build savings, if possible. The fallout from the pandemic may continue for some time. Taking even small steps can help you feel empowered and less stressed.

First, take stock of your regular expenses, such as housing costs, car loans and credit card or other debt payments. A budgeting worksheet can help account for everything and show what’s going to needs, wants and savings and debt. Once you see the big picture, consider trimming where you can because of the current uncertainty.

“We’re all operating on a limited cognitive load right now,” says Kristen Holt, CEO of the nonprofit credit counseling agency GreenPath Financial Wellness. “Writing everything down and thinking it through first before you spend any of the money out the door would be a good idea.”

If you’ve lost your job, don’t wait to act

Those who’ve lost jobs might feel like the floor has fallen out from under them. Money from the government will provide a much-needed boost, but it might be weeks or even months before you get it. And you’ll likely need to supplement and stretch it.

“The amount of these checks is not going to go very far for paying people’s regular bills,” says Carol Fabbri, principal at Fair Advisors, a Colorado-based financial planning firm. “They need to reduce their bills as much as they possibly can, then think about Maslow’s hierarchy of needs — you need to eat, you need shelter — and focus your spending there.”

With that in mind:

Take advantage of all sources of help

Pick up the phone and call your creditors. Explain your situation and work out a way to either delay payments for a few months or work out new minimum payments. Given the unprecedented nature of this moment, many creditors are offering ways to make payments more manageable for consumers. For homeowners, there are mortgage assistance programs you can tap if you can’t pay your mortgage.

Explore resources to help manage and minimize expenses. File for unemployment if you’re eligible and use any resources your former employer may offer. Calling 211 will connect you with local health and social services organizations.

Make a plan for the money you get

Focus on necessities, like housing and food, to ensure your basic needs are met.

If you have anything left over, you might be tempted to throw this money at debts. But saving should take priority right now, says Diane Pearson, a financial advisor at Pearson Financial Planning in Pennsylvania.

“We don’t know how long this situation might last and there might be a need for this money down the road,” Pearson says.

If it’s still not enough

For many people, this money won’t cover all of their expenses, even after all governmental and nonprofit resources are tapped. In that event, accruing debt to cover expenses may be a last-resort option but can be done strategically. Many of the “rules” about using credit cards don’t apply right now.

“If you’re going to get further in debt, do it with a plan and make sure you’re utilizing the best available options for you,” Holt says. “Don’t assume there aren’t options.” She suggests exploring loan options from local credit unions, for example, and steering clear of high-interest loans like payday loans.

Continue here to read the entire article on NerdWallet.


Not Sure How to Best Use Your Government Relief Check? GreenPath is Here to Help

GreenPath offers free financial counseling and education to support people in meeting their financial goals.  Our professional, caring financial coaches will work with you to assess your situation, explain the options or solutions available, and help you create a spending plan.

If you have been financially affected by COVID-19, or for any reason, let’s talk. We will work with you to identify resources and help you create a plan to get through this difficult time.

Request a Call with a Financial Expert


Kristen HeadshotKristen Holt is president and CEO of GreenPath Financial Wellness based in Farmington Hills, Mich. GreenPath is a national nonprofit that supports lifelong financial wellness for everyone.