The Covid-19 pandemic has affected many people and businesses financially, as well as other ways. Many find themselves out of work or furloughed. Many still have jobs but are dealing with long absences due to quarantines and being sick with Covid themselves. Some have had to quit their jobs in order to homeschool their children. Additionally, tourism is down and many businesses have closed, meaning the economy has definitely taken a hit this past year. With another round of stimulus checks in discussion, you may be wondering how these checks help the economy and what is the most helpful way you can use this money.
1. Consumer Spending
During a time of financial hardship, people naturally spend less. During the pandemic, a significant percentage of people country-wide have experienced job loss, lost wages, and other forms of financial difficulty. That means that many are struggling to pay rent, mortgage, and to buy food, let alone other items. This lack of spending affects the economy overall as there is less money making its way through the system. A major goal of the stimulus checks is to promote spending in order to replace lost money in circulation.
2. Increase in Jobs
When spending increases, the demand for products increases, as well. That demand gives many businesses the boost they need to stay afloat and hopefully to require more employees, leading to more jobs. At the least, these businesses will not have to lay off workers already employed with them. It is especially important to support small businesses during this time, as many small businesses are struggling to stay open.
3. Helps Families Stay Afloat
Before families can think about spending on extra items, they need to be able to afford rent, food, and healthcare. With the large amount of layoffs, furloughs, and decreases in income, many families find themselves in financial situations they never imagined they’d be in. Families who were previously comfortable are now unable to pay their bills. These families truly need the stimulus money in order to pay their monthly bills and stay afloat until their financial situation changes.
Consider How You Will Spend the Stimulus Checks
Stimulus payments can be controversial, as nothing is truly free. Money that helps the economy now may come at a cost later by putting the government further into debt. It’s important, therefore, to make sure to spend your stimulus money in ways that contribute to the national economy rather than tucking it away in savings. That said, there are many ways the stimulus checks can be beneficial to individual families, even if it means putting it into a savings account for the time being. The experts at DeSantis, Kiefer, Shall, & Sarcone can help you plan for the best way to spend your stimulus money, as well as how to manage your finances during this difficult time.