Helpful Tips on “Best Ways” to Use Your CARES Economic Impact Payment

This original article was written for KTRS The Big 550’s “Money Matters” segment. Author credit by Pier Yvette Alsup, Chief Community Engagement Officer.

Under the CARES Act (Coronavirus Aid, Relief and Economic Security) passed in late March, Americans whose income falls below a certain threshold are eligible to receive a one-time economic impact payment up to $1,200, and receive up to $500 per dependent child under age 17.

The time frame for getting your economic impact payment depends largely on the information the IRS has on file.  Many have received payment already, and many are waiting. If you’re entitled to payment, it will reach your bank/credit union account or mailbox eventfully.  And, when it does, here are a few tips on “best ways” to use these funds:

First:  Write down your plans for your economic impact payment. 

If you file and pay your taxes electronically or receive refunds electronically via direct deposit, these funds will be deposited automatically to your corresponding bank/credit union account.  If you have specific, written plans for these funds, you will be less likely to spend them impulsively or fritter them away without much thought. 

Second:  Use some of these funds to take care of your immediate needs – medications, food, utilities, housing – as these expenses are typically essential. 

Keeping you and your family safe and healthy is a priority.

Third:  Put some of the funds towards “emergency savings”. 

Sounds a little ironic as many consumers may feel they are experiencing an emergency situation now, but the next few months will roll around sooner rather than later, and having some of these funds to use for essentials then can bring peace of mind.

Finally:  Review all of your existing loan obligations – auto, home, credit cards.

Many financial institutions are offering temporary relief options including skipped payments, waived fees, and refinance opportunities.  Depending on your individual situation, this type of assistance may be beneficial; however, it’s important to stay current with your obligations when at all possible so these funds may be just the assistance you need to do so.  If keeping current is simply not an option based on deduced or eliminated  income and/or savings, be proactive in contacting your lenders to explain your situation. 

If you have yet to receive your economic impact payment, you can visit the IRS “Get My Payment” page to check its status.

Important Note:

The IRS will not call, email or text you about your taxes or about your economic impact payment.  They will not contact you to request personal information or account numbers.  This includes requests for your social security number, PINs, passwords, credit card or debit card numbers, account numbers or names of financial institutions.  There is no “fast track” to getting a stimulus payment earlier and there is no confirmation needed in order to get it.

Additionally, whether you receive your economic impact payment via direct deposit or paper check, the IRS will send you a letter in the US Mail 15 days later, confirming the payment was sent. Again, they will not call, email or text you.  The IRS only communicates via the US Postal Service.

Scammers are in full motion when consumers are in a vulnerable position, or in a state of need, as many are now.  This pandemic environment is no different. 

Here are a few reminders to avoid scams:

If you are concerned a call my be legitimate, don’t press any buttons or respond with information, simply hang up and call the company or institution directly to inquire.  Same goes for email.  If you receive an email or text that you were not expecting, but concerned it may be legitimate, do not respond to it or click on any links or open any attachments.  Delete it and contact the “sender” directly to inquire about the validity of the issue or request.  Finally, cyber criminals regularly create fake websites and ads to encourage people to click links. These sites and ads may tease prices well below market value or may offer limited quantities to create a sense of urgency. If you are unsure about the advertisement or vendor, or it sounds too good to be true, do not click the link. 

For more information and convenient tools for budgeting, emergency savings, debt management services, and other financial education, visit the Together Credit Union web site.