Financial expert Suze Orman stated there are better things you could do with your $1400 stimulus check. According to Orman, Americans' most recent series of the stimulus checks would be beneficial in the long-term. However, instead of spending it or paying off debt, she remarked it would be safer to build a rainy day fund.
Financial Guru's Take on Stimulus Check
On March 11, President Joe Biden signed the $1.9 trillion COVID-19 relief package. For the majority of Americans, the most tangible part of that $1.9 trillion are the stimulus payments.
An estimated 159 million households are slated to receive the third series of direct payments in the coming weeks. According to Orman, while the stimulus checks are typically meant for urgent use to shore up budgets and stimulate the economy, the public should focus on preparing for upcoming emergencies, reported CNBC.
Orman said that for years, she usually said eight months. "And for years, you know how many other people went you don't need eight months, all you need is three months, all you need is six months," reported The Sun.
A number of stimulus checks have already been disseminated. They were transferred via direct deposit in bank accounts on the weekend of March 13. Just like everything that hits the United States on a mass scale, the checks were swiftly memed. Orman remarked people need to be prepared for at least another year of diminished income.
The financial expert then begins recalling the beginning of the pandemic, when people thought the phenomenon would be hastily over. She said, "What happened last year?" She added three months would have gone in three months and asked viewers what could they have done. "Six months would have lasted you. And now it's passed that eight months wasn't even enough."
Third Stimulus Checks To Be Received Starting This Weekend
People imagined using their stimulus checks, known colloquially as "stimmys," to make large demands. This includes finally shopping the "Beyond" section of Bed Bath & Beyond or speaking directly to the Burger King. However, while joking is good, the value of the stimulus check is all relative, reported Vox.
Orman summarizes her main point by uttering that one could not have too much of an emergency fund. According to the guru, the novel coronavirus pandemic has already lasted one year and is still ongoing. This is taking into consideration the record high unemployment numbers and those who are grappling to make ends meet.
For United States citizens who have lost their livelihood during the coronavirus pandemic, the $1,400 is not financial Band-Aid; it would not cover the bills that keep on coming. More privileged Americans may be able to use the stimulus checks to stimulate the economy. However, this past year has exhibited that the mere constant is unpredictability and that saving that money is not necessarily a bad idea.
Among her other points, she advocates for paying off the minimum on credit card debt and other debt so they could "play it safe." But she cautions everyone to bulk up their safety funds. She thinks 12 months minimum is what one needs. She added the key to freedom is having that security, which is the emergency fund.
