Money Talks for March 28, 2020

Brad Zucker discusses what you should do with your stimulus check.

SKYPE TO ANSWER QUESTIONSREGARDING THESE STIMULUSCHECKS.Q: WHAT'S IN THIS BILL?

THEBILL PROMISES CHECKS TOHOUSEHOLDS, EMERGENCY LOANS FORSMALL BUSINESSES, MORERESOURCES FORHOSPITALS AND ENHANCEDUNEMPLOYMENT INSURANCE.WE'RE WAITING TO SEE THE FINALBILL, BUT AN EARLIER VERSIONPROMISED UP TO $1,200 TO MOSTADULTS AND $500 FOR CHILDREN.THAT AMOUNT IS REDUCED FORTHOSE MAKING MORE THAN $75,000A YEAR.LAWMAKERS ALSO SET ASIDE $150BILLION FOR HOSPITALS AND $367BILLION TO HELP SMALLBUSINESSES AVOID LAYOFFS ANDSUPPORT PAYROLL.THIS $2 TRILLION BILL IS THELARGEST EMERGENCY RELIEFPACKAGE IN AMERICANHISTORY.THE GOAL IS TO SLOW A RECESSIONAND STIMULATE A HURTINGECONOMY.Q: HOW SOON CAN WE EXPECT OURMONEY?

THE STIMULUS DEALINCLUDES CHECKS TO AN ESTIMATED90% OF AMERICANS, BUT WE MAYNOT SEE THE MONEY RIGHT AWAY.PRESIDENT TRUMP AND THETREASURY SECRETARY WANT THEPAYMENTS ISSUED BY APRIL 6,HOWEVER EXPERTS SAY THAT TARGETDATE IS AMBITIOUS.IN 2001, IT TOOK SIX WEEKS FORTHE IRS TO START SENDINGCHECKS.THOSE CHECKS STEMMED FROMPRESIDENT GEORGE W.BUSH'S TAX CUT.DURING THE GREAT RECESSION IN2008, AMERICANS HAD TO FIRSTFILE THEIR TAX RETURN IN ORDERTO GET THEIR CHECK.AFTER FILING A RETURN, IT TOOK8-12 WEEKS TO SEE THE MONEY.HOWEVER, PEOPLE MIGHT GET THEIRMONEY FASTER THAN IN 2008BECAUSE MORE ARE FILING TAXESELECTRONICALLY AND THE IRS HASQ: WILL THIS STIMULUS PACKAGESPUR THE ECONOMY?

NEW NUMBERSSHOW AS MANY AS 10 MILLIONWORKERS WILL SEE AN IMPACT ONTHEIR PAYCHECKS AS RESTAURANTSAND OTHER BUSINESSES TAKE A HITFROM THE CORONAVIRUS OUTBREAK.AS A RESULT, THE FEDERALGOVERNMENT WANTS TO HELP EASETHE FINANCIAL BURDEN.WITH THE GOVERNMENT PUTTINGMORE MONEY IN THE ECONOMY, THEHOPE IS UNEMPLOYMENT WILL GODOWN AND CONSUMERS WILL SPENDMORE, EVENTUALLY REVERSING THERECESSION.Q: WHAT SHOULD WE DO WITH THISMONEY FROM THE GOVERNMENT?WHILE THE HOPE IS THAT PEOPLESPEND IT AND STIMULATE THEECONOMY, THERE ARE A FEW THINGSYOU CAN DO TO BENEFIT YOURFINANCIAL SITUATION NOW AND INTHE FUTURE.ELIMINATE DEBT HOUSEHOLD DEBTIS AT AN ALL-TIME HIGH WITHAMERICANS OWING MORE THAN $14TRILLION.FROM CREDIT CARD DEBT TOSTUDENT LOANS AND MORTGAGES,EVERY GENERATION IS IMPACTED.USE THIS MONEY FROM THEGOVERNMENT TO TACKLE YOUR DEBT.THERE ARE TWO POPULAR METHODS:THE AVALANCHE METHOD ENCOURAGESYOU TO TACKLE THE DEBT WITH THEHIGHEST INTEREST RATE FIRST.THE SNOWBALL METHOD ENCOURAGESYOU TO PAY OFF THE DEBT WITHTHE SMALLEST BALANCE FIRST.WITH EACH METHOD, CONTINUEMAKING AT LEAST THE MINIMUMPAYMENTS ON YOUR OTHER DEBTS ASYOU WORK TO PAY IT ALL OFF.SAVED TO COVER 3 MONTHS OFEXPENSES.IF YOU'RE CONCERNED ABOUT BEINGLAID OFF IN THE NEAR FUTURE,TAKE THE MONEY YOU RECEIVE ANDSTART AN EMERGENCY FUND.YOUR EMERGENCY FUND SHOULD HAVEENOUGH MONEY TO COVER 3 - 6MONTHS OF EXPENSES IF YOU WEREHAND, MANY PEOPLE TURN TOCREDIT CARDS TO COVERUNEXPECTED EXPENSES.WITH AVERAGE INTEREST RATESOVER 17%, CREDIT CARD DEBT ISTHIS EXTRA MONEY CAN HELP YOU