3 Thoughts On The $1,200 Stimulus Check (Economic Impact Payments)
I’m a little late to the party with this post on the 2020 stimulus checks as some of you have already received yours. But I keep getting asked questions so I’d like to try to answer some of them.
Before I answer those questions, let’s just set the stage here. Imagine you are trying to coordinate this massive effort of getting money into people’s pockets as quickly as possible. If it was a couple thousand people, it would be challenging but not impossible.
A million? That would be hard.
One hundred million plus? Yeah, you are asking for a giant mess. I know that this is no easy task. It most likely wouldn’t run smoothly even if they had a year to prepare, let alone just a few weeks. And here we are, standing in the middle of the mess.
Although some people have received their allotted funds already, the majority of Americans have not. No one can really say when you’re going to receive it, there’s 100 rumors about the checks, and the government has not really done a great job in clearing all this up.
The people that need this $1,200 stimulus, the ones truly counting on it for survival, aren’t getting it fast enough. The government is relying on past tax documents to calculate who gets what and they’re pulling your direct deposit data from it. I’m usually anti-government but there really was no good way to get the data they needed so I don’t fully blame them.
Having your stimulus check get sent to an old bank account that you closed sucks. A stimulus check going to someone who is dead instead of a family that needs it also sucks. If you filed your taxes with H&R Block, TurboTax, or other popular tax software then you may have to wait months.
1) When is your stimulus check coming?
As I mentioned, the IRS has already started sending money directly to individual’s bank accounts. I have friends and family that have received theirs. Even though they have received their checks I have not gotten mine. I tried to figure out if there was a pattern or system the IRS was using to give out these payments but I haven’t been able to find one. It just seems random.
Wouldn’t it make sense to start with people that claimed the lowest amount of income and then move up the ladder? I’d sure think so.
Luckily (or unluckily) the trusty government has gone out of their way to set up a website where we can check the status of our stimulus money. Of course, it works flawlessly. (Ha.) Here’s when my check is coming:
Awesome right? It tells me exactly when I will have my money! No wait, it doesn’t tell me anything and instead, it just sends me to a vague, not overly helpful FAQ page that also tells me nothing. Feel free to check the status of your check by clicking here.
I have seen many people all over the internet post about getting the same message so I’m not entirely worried. That being said, if I was in a different situation I would be very worried. This message plus some of the answers on the FAQ page would make you think it’s not coming at all. I think the government is dropping the ball here in a major way.
Our country spends over a trillion dollars a year. The worlds largest companies with some of the smartest, most innovative thinkers are Americans. Our solution to this problem was a website that doesn’t work? The government spends $84 million to write manuals for an airplane that flies around one (albeit, some would say the president is an important one) person but when it comes to the average American, they do the bare minimum. I don’t know about you, but I am not impressed.
2) What should I spend my stimulus check on?
If I had a dollar for every time I have been asked this question, then I wouldn’t need a stimulus check. Personally, I’m not a huge fan of this question and many think my answer isn’t helpful but it is what it is. I have seen many posts floating around from the personal finance blogging community that are good but some just miss the mark. Here’s my take:
First, make sure you have cash. If you don’t have a 6-month emergency fund (at minimum) in cash then your money needs to go there. That’s the only place you should even consider. I’m all for supporting local businesses and stimulating the economy, but you need to take care of yourself first and foremost.
Secondly, make sure you have your necessities paid for. If you are working then you are in a privileged situation. Over 20 million Americans have filed for unemployment in the last month and that number is only going to increase. I wouldn’t be surprised it if goes over 50 million in the next couple of months.
Third option, do whatever you want. If you don’t want to have an emergency fund or make sure you have all of your necessities paid off, then who am I to tell you how to live your life? Have you ever heard the saying “You can lead a horse to water but you can’t make it drink”?
That applies here.
I have a couple of safety net suggestions but at the end of the day, it’s your money. You make the rules. No one can tell you how to spend it. You can save it, invest it, go buy a case of wine, or some other splurge you’ve been eyeing. Heck, you can even donate the whole thing if you want. It’s your choice.
If you are stuck and have no clue what to do (I don’t foresee anyone having trouble spending it) but I do have one suggestion. My course Money Made Easy is only $99. Yes, it used to be more expensive but these are crazy times and I want to help people. The last thing I want is the price of the course be what holds someone back from learning about taking control of their finances.
3) Is the stimulus check going to be enough?
I’m going to speak freely here. One, because this is my website and two, I’m pretty sure we are all thinking the same thing.
The $1,200 stimulus check or Economic Impact Payment as the IRS is calling it is a joke. It’s a way to make people feel like they are getting something that the government owes them even though in my eyes, its peanuts. Very few people can live on $1,200. Yes, I understand there are other things people can apply for like unemployment but that is its own mess.
In Kansas, there are hundreds of thousands of calls coming into the unemployment office every single day. Governor Laura Kelly even said there are about 5,000 phone calls per employee each day. Obviously, an impossible task to take on. Start thinking about the larger states and the issues rise exponentially.
There is a rumor that a second stimulus checking is coming but many people won’t even receive the first check for up to six months. Additionally, the second check would have to go through the whole process just like the first, which will take weeks. It will probably happen but I wouldn’t make any plans around it.
I would love to see every American get $1,000 a month for the next six months. I don’t care about your age, location, or whatever over dividers you can think of, every single American.. How would we get this money? Where does it come from? Well we wouldn’t bail out big corporations (again). Instead let them go through the bankruptcy proceedings like they have all done in the past.
If you start putting that money directly into individuals pockets, they will spend it. Happily! The economy will recover, companies will grow again, the mortgage/housing market will be saved, and so on.
The Bottom Line
I wish this post was more optimistic but people are hurting and in need of help and our government, the one we pay a lot of tax money to, isn’t stepping up to the plate. This isn’t a matter of democrats or republicans being difficult, this is a systematic issue. Everything looks good when life is easy but we’re not passing this test of hard times.
I wrote about all of this a month ago in my post What Keeps Me Up At Night – Coronavirus & The Economy. I wish I could say I was wrong, I really do. But history repeats itself and just like 2008 we are going to do what is best for the big fish and not the individuals that actually make up the country.
When you receive your stimulus money think twice before you spend it. Again, I’m not telling you how to handle your money I just want you to make a good decision that you won’t later regret.
Be safe, check in on your friends and family, and we’ll all get through this together.
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