What the Government's $2 Trillion Stimulus Means For You

In a new bill to relieve hardships and boost the economy, the government will send out $1,200 for each adult and $500 for each child. But you should read this before you do anything!

There is clearly a lot going on right now. The effects of the coronavirus (COVID-19) are in full force and have sent waves across the world. Now it’s hitting us in our daily lives and we are all trying to adjust to this new reality. To say the least, it’s been a crazy few weeks. Just know that you are not alone and we are feeling it too.

Thank you for all of your questions and please know this: We hear you. If you have any financial questions, please send them through: voice messages, Facebook, Instagram, or Twitter.

Many questions have been about what to do if you’re still paying off debt, your thankfulness for having a financial plan in place, your fear about what happens if or when you are out of work (i.e., missing a paycheck). It feels like there are more questions than answers right now, you’re not alone. But Stewart Solutions is here to help and provide as many answers as possible during this difficult time.

One of the biggest questions is - What should you do while you wait out this pandemic? The government wants to step in to help people out, but will that actually make a difference? This blog post is everything you need to know about the coronavirus stimulus money, plus how to live to fight another day.

What’s the Coronavirus Stimulus Plan?

The U.S. government is trying to do something to balance out the amount of hardship that Americans are carrying right now, encourage the economy to spring back, and aid small businesses. The Coronavirus Aid, Relief, and Economic Security Act (CARES) is the government’s answer to these needs. But it isn't cheap. The bill for the economic stimulus package is $2 trillion. That is with a "T".... Ouch. Of that, $300 billion would go to Americans, $350 billion in loans to small businesses, and $500 billion in relief to other businesses. That’s a lot of money (that the United States did not have, so they printed it). Double Ouch.

In Episode 2 of The Gary Stewart Show - a listener asked - How much of the stimulus check will they receive? (among other questions).... Here’s how it all breaks down:

Individuals who filed taxes in 2018 or 2019 would receive $1,200 for each adult and $500 for each child. If you’re a household of two adults and two children, your amount would be $3,400. To qualify for full aid, your adjusted gross income (your income before taxes) would need to be under $75,000 for each individual, $112,500 for head of household, or less than $150,000 for each married couple filing jointly.

So.... basically if you make more than those limits, the check amount would be $50 less for every $1,000 that your income goes over the limit OR $5 less for every $100 that your income goes over the limit. So yes, there’d be some folks who would get very small amounts in their checks, and taxpayers with incomes more than $99,000 (individual) or $198,000 (married) wouldn’t be eligible at all.

Nearly 80% of Americans are living paycheck to paycheck. The coronavirus stimulus money may help you keep food on the table and the lights on—but the reality is, if you’re out of work, $1,200 isn’t going to go that far for that long. The government’s goal is to get checks into the hands of Americans within three weeks of the bill being passed. Whether you are receiving a stimulus check or not, you should still have a financial plan for your money. If you still aren't convinced.... Are You Financially Fit?

What Should I Do With My Stimulus Money?

If you are struggling to cover all of your bills, you need to focus on the things you really need to survive. We call these essentials STUF. This is your priority, so pay for these things before anything else. If you’re someone who is out of work or missing a paycheck, you can use this money tip to protect yourself and get through this difficult time:

  1. Shelter

  2. Transportation

  3. Utilities

  4. Food

For some peace of mind, focus on "STUF".... If you’re worried or having trouble keeping food on the table right now, use some of that stimulus money to keep the bellies in your home full. After that, make sure you can keep the lights and water on. And on a lighter note, if you have kids currently in your fabulous homeschooling program, your sanity will appreciate having the ability to turn on Netflix or Disney+ too.

After that comes your home aka Shelter. Whether you’re paying rent or a mortgage, make sure some of this money covers the roof over your head. Right now, the U.S. Department of Housing and Urban Development (HUD) has said that all foreclosures and evictions are suspended through the end of April 2020. That is one less thing to worry about. The final item is transportation. If you have to drive, then keep gas in your car. Otherwise, maybe this is an expense you can avoid if it is not "essential."

10 Money Tips

Everyone likes the idea of money falling from the sky. If you’re really in a tough spot right now, then you might be waiting around for unemployment or the government stimulus check. DON'T. You need to take action now. Don't wait for the government to bail you out. You might be losing a paycheck, but that doesn’t mean you need to lose your hope too. Hang in there! If you’re not getting paid right now and you didn’t have an emergency fund to begin with, we’re not here to beat you up about it. But once the clouds have cleared and you get that paycheck again, you need to make getting out of debt and building an emergency fund a priority.

Until then... Use these money tips which are things you can do right now to make it through the chaos:

1. Get on a written budget.

Don’t know where your money goes? Start doing a budget. That’ll tell you exactly where your hard-earned money is going. Without a budget, it’s pretty easy to live this way. Why? Because you don’t have a plan. And you really can’t make your dollars stretch because you might not even know how much money you have to work with! That’s where your budget will show you places where you can cut back. Don’t worry, though, we’re not going to leave you hanging without telling you exactly how to do a budget.

Here is how a budget works: Your monthly income minus your monthly expenses needs to equal zero. But that doesn’t mean you don’t have any money left in your bank account. Instead, you’re just making sure every dollar is being used (or spent) intentionally. This means you’ve decided exactly where that money will go for the month (including savings). So whether you are getting a paycheck, unemployment, or stimulus money - YOU NEED TO BUDGET.

First, jot down your income for the month . Next, start listing all your expenses for the month. Things like rent, food, internet, phones, and everything in between should be added to the list. And because expenses change from month to month, you need to be sure to make a new budget before each month begins. Now you want to subtract all your planned expenses from your monthly income. Remember, the goal here is that you end up with zero. Leave a buffer, meaning you should keep some money in your checking account. Nothing crazy, just $50–100 will do. You’ll want this buffer to stay there to help you avoid any overdraft fees or any kind of “oops!” Now here’s the next, super important step—forget the buffer exists. Put it out of your mind completely so you aren’t tempted to overspend!

2. Start a side hustle to supplement (or replace) income.

If money is tight, you need to bring in more income. While you can (and should) go after promotions and salary increases at your full-time job, you might need to do something to increase your income sooner. Queue.... side hustle!

Some great options include waiting tables, driving for Uber or Lyft, Door-Dash, being a barista, freelancing, tutoring, mowing grass, snow removal, working at a call center, or signing up to be a substitute teacher. The point is, do whatever you need to do to make more money. There are even plenty of work-from-home jobs you can do after hours or on the weekend too. And even if those don’t work out, you can still take up odd jobs around your neighborhood (picking up leaves, babysitting or dog walking). Rich people hate doing this stuff and will pay you well for it! If you want to start up a side hustle, focus on using your talents (you know, things you’re good at) to make extra money. You can use your design, sewing or baking skills to help bring in some money. Be on the lookout for opportunities that will add any extra cash in your pocket.

If you’re out of work because of the coronavirus, we know you’re hurting. This thing has affected almost every aspect of our lives, and for some of us, even our paycheck. But there’s a great place to go when you’re broke—to work!

Believe it or not, places are hiring right now. Amazon just announced they’re adding 100,000 jobs. Grocery stores like Kroger and Safeway are hiring stockers and cashiers to keep up with all the demand (someone has to restock all that toilet paper, right?). If you’re someone who doesn’t want to come into contact with people right now (we don’t blame you), you can still deliver for places like Shipt, Amazon, Grubhub or Postmates. Most people ordering delivery right now don’t want to come into contact with you either, so you’ll probably be doing a lot of doorstep deliveries. And don’t forget the kids in all of this. Most schools are shut down for at least a month. That means there are all kinds of opportunities for tutoring, even virtually. Maybe your neighbors still have to go into work and they have no childcare for the kids. Offer to babysit while they head off to work!

Bottom line here? Don’t wait around for the government to cut you a check. You can get started on taking matters into your own capable hands right now! The truth is, the money from the coronavirus stimulus isn’t going to be enough to fix everything. It’ll sure help, but it won’t solve all your problems. You’ve got to get your income up, and that’s possible—even in these weird times we’re living in.

3. Avoid debt.

Whatever hardship you encounter during this difficult time, do NOT compound the problem but getting into debt. If you can’t live within your means now, you’re not going to be able to do it when this is over. If you aren’t careful, and are using credit cards to get you through this then you are spending even more money and digging yourself a hole you won't be able to get out of easily. Sure, it’s tempting to spend money on your credit card but don’t do that! Get on a budget, use cash/debit, stay intentional, pay attention, and stick to your budget no matter how bad you think this pandemic gets.

4. Don't make big financial decisions based on panic or fear.

There is a lot of uncertainty right now. The stock market is spiraling down and the nation is freaking out. I realize that your personal finances may be top of mind right now and, given the stock market trends, panic may be setting in. I strongly believe maintaining financial health is of the utmost importance. It is important that you do not make any financial decisions based on fear or panic. If you’re concerned about your investments, think of the stock market like a roller coaster. There are many twists and turns, ups and downs. You should wait until the roller coaster comes to a stop before you decide to get off the ride (aka make changes to your portfolio). If you make changes based on fear or panic (aka during a roller coaster ride), that's where you make mistakes and irrational decisions resulting in financial loss. Keep in mind, it’s only an “unrealized loss” on paper. Once you sell or make changes, then it becomes a “recognized loss”.

This may cause you some financial stress. The Financial Health Institute defines stress as a condition caused by financial events that create anxiety and worry, often coupled with a physical response. And if you’ve ever experienced any form of financial stress, you won’t soon forget it.

Financial stress can sneak up on you out of nowhere. Usually, you know exactly what it is when it happens.... it’s not pretty. But the surefire way of figuring out if you’re suffering through financial stress is identifying the symptoms. Here’s what to look for:

  • Anxiety

  • Worry

  • Panic attacks

  • Depression

  • Guilt

  • Denial

  • Emotional numbness

  • Difficulty sleeping

  • Gaining/losing weight

. . . and that’s just to name a few.

Financial stress has also taken a toll on marriages nationwide. A 2017 study by Ramsey Solutions found that money is the number one issue married couples argue about: “41% of couples who have consumer debt say that they argue about money and it’s what they argue about the most.” Financial stress doesn’t have to take over your life—or your marriage. And we’re here to help.

If you want to get rid of financial stress, you’ve got to do things differently than what you’re doing now. And it all starts with addressing your money behaviors. The bottom line? No matter what kind of financial stress you’re going through, there’s hope!

5. Financial Spring Cleaning.

Spring Clean your personal finances! Use this time to tidy up your finances, write down your money goals, and get on a proven financial plan! Here are some tips on how to Spring Clean your finances:

  • Literally Clean Out Your Old Stuff. Separate your outgoing items into three piles: sell, donate, and trash.

  • Clean Up Your Paperwork. Make your file storage digital to be more organized and cut down on clutter.

  • Set (or Check Progress on) Financial Goals for the Year. Maybe you want to save more or pay down debt? Whatever it is, be intentional.

  • Review (or create) Your Monthly Budget.

  • Cancel Unused or Unnecessary Subscriptions. Watch Tiger King before you cancel Netflix :)

  • Plan & Budget for Remaining Irregular Expenses This Year.

  • Plan Your Retirement Contributions (or temporarily pause them to use that money towards becoming debt free and establishing a 6-month emergency fund).

  • Adjust Your Tax Withholdings. The goal is to not get a BIG tax refund and to not OWE taxes. Aim for a $0 tax bill (breakeven).

  • Review Health & Life Insurance Policies.

  • Learn About Saving, Investing, Debt, etc.

  • Review Your Net Worth. This is what you own (assets) minus what you owe (liabilities).

  • Pull Your FREE Credit Report and Review It.

6. Be generous.

A lot of people are struggling right now. Be generous. The proposal in the stimulus would let non-itemizers take up to a $300 above-the-line charitable income tax deduction for cash donations made in 2020. So for folks who take the standard deduction, if you give $300 to charity, you’d get the $300 tax break in addition to the standard deduction ($12,400 for individuals and $24,800 for married couples filing jointly). You can also be generous by tipping like a boss. If you get takeout or by a coffee, etc. tip 20%, 30%, 40% - whatever you can afford. You could really help others that need it just by tipping a little extra during this time.

7. Sell stuff.

It’s time to bring in more money! One of the easiest ways to get your hands on some extra cash is by selling whatever you can get your hands on. Maybe that’s your jewelry, clothes, baby items, or even the extra car sitting in your garage. If you know you can part with something and get cash—do it! Well, within reason. Don’t go selling organs, your pets, or your children on the black market - but you get the idea. But do get so intense about selling things.

8. Cut expenses.

Let’s be honest, social distancing can do a lot of good for your budget. After all, no one is tempted by happy hours or shopping right now, hanging out in a crowded theater, or going on vacation. A lot of places that could tempt you into spending are actually closed right now, and that’s a good thing for your bank account. Be proactive and see where else you can cut back. Pause subscriptions, buy only essential items and live off of the staple groceries in your pantry. If you don’t know where to begin when it comes to figuring out what to cut, look at your budget.

9. Stay connected.

It’s easy to feel like we’re all living in the middle of some science fiction novel right about now. Things are very weird and we are all trying to adjust. But don’t let that drive you to make poor decisions in an already heated time. Run as far as you can from personal loans or credit cards. You don’t want to make a rough situation even worse here. They might have cut your job, closed your business, or quarantined you, but do you know one thing that no one can take away from you? Your spirit. The human spirit is resilient, and it shines like none other during trying times of chaos, times like these. So get off social media, turn off the news, and tap into things that bring you joy and hope. Feed your soul. Stay connected with friends and family using resources like Zoom, Google Hangouts, or FaceTime. You can do virtual happy hours, virtual workouts, virtual game nights, etc. Be a beacon of light to everyone you come into contact with—but do this virtually so you are at least 6 feet apart and "socially distant."

10. Support local businesses.

Social distancing is the right thing to do right now. However, this may impact your local businesses in a negative way. Here are some tips on how to support your local businesses:

  • Buy gift cards

  • Get delivery

  • Shop local online

  • Tip like a boss