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Consider These Five Potential Ways to Use Your Coronavirus Stimulus Check

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What we’ll cover:

  • How you decide to spend the stimulus check depends on your financial situation. Paying for essentials will likely be the top priority for many people
  • If you have your essentials covered, check in on your emergency fund
  • Consider using the stimulus money to tackle debts
  • Retirement savings is still important if you can afford to continue contributing
  • If your financial situation is in good order, you may consider donating your stimulus check to help support those in your local community

As part of its response to the coronavirus pandemic, the US government is sending a one-time economic impact payment (commonly referred to as a “stimulus check”) to qualifying taxpayers. Eligible individuals can receive up to $1,200 ($2,400 for joint filers) if they meet certain income criteria, with an extra $500 for each qualifying child. 

Millions of Americans are expected to receive a payment from the IRS. This assistance comes at a critical time when many of us are facing a great deal of uncertainty and unprecedented challenges in our everyday life. 

People are hurting. And for those who have lost their jobs, had their hours reduced or shuttered a business, the stimulus check will no doubt be going towards paying for essentials first.

If you have a greater degree of job and income security and have your essential needs covered, you may be wondering how you should use the stimulus payment. 

There are no right or wrong answers. How you decide to spend the money depends on your financial situation – priorities will be different for everyone. Generally, you may want to focus on these areas: essentials, emergency cash reserve, debt payments and retirement savings. For those who have the financial resources to do so, you may also consider donating your payment to extend a helping hand to those most vulnerable in your local community.   

Let’s take a closer look at all of these options.


For people who have lost their jobs or are anticipating a layoff, there’s no question that the stimulus money should be spent on covering day-to-day essentials.



As of mid-April 2020, more than 22 millions of Americans have filed for unemployment since a national emergency was declared. The loss of a job or a steady paycheck is tough under any circumstances, but layoffs during a national emergency are particularly stressful – compounding the anxiety we already feel about our health and general welfare. 

Authorized under the CARES Act, the economic impact payment from the IRS is designed to bring some financial relief at a time when many are struggling.

For people who have lost their jobs or are anticipating a layoff, there’s no question that the stimulus money should be spent on covering day-to-day essentials. By this, we mean things like rent, food, utilities and medicine.

Good to know: You may now use your Health Savings Account or Flexible Spending Account to help pay for certain over-the-counter medication thanks to the CARES Act. Read "Covid-19 and The CARES Act Have Changed Some HSA and HDHP Rules" to learn more.

In this global crisis, it’s more important than ever to take care of ourselves and our family and make sure we’re able to cover our essential needs first before doing anything else. This is self-care at the most basic level and should be a priority.

Emergency cash reserve

If you do not expect any major changes to your job and income and are able to cover your essential expenses without the help of the stimulus payment, then consider shifting your attention to your emergency fund. 

A few questions you might want to ask yourself are: Do I have enough saved? Are the funds located in an easily accessible account such as a traditional or high-yield savings account, so that I could withdraw the money whenever I need it? 

As a general rule of thumb, your emergency fund should have enough money to cover three to six months of living expenses – at least. But if you can save more, you should. The coronavirus pandemic has brought unprecedented challenges to our health care system and economy. It is hard to say with any certainty when things will get back to normal. So if you’ve got your essential expenses covered, you can consider using the stimulus check from the IRS to build up your emergency cash reserve.

Debt payment

What if your emergency fund is already in good shape? Then the next area in your finances you might want to look at is your debt and consider using that stimulus money to paying it down.

For example, it might be a good idea to apply the extra cash towards any debt payments such as credit cards, personal loans, or auto loans. Paying down outstanding balances, especially those with a high interest rate, could help you save money on your total interest payments when it’s all said and done.  

Given these challenging economic times, many lenders are providing financial assistance to borrowers. So check with your bank to see if they’re able to offer more flexible payment options, waive late fees or even lower your interest rates. 

For those who have student loans, you may want to hold off on tackling those for now. That’s because the Coronavirus Aid, Relief and Economic Security or CARES Act, signed into law in March 2020, has suspended principal and interest payments on federal student loans from March 13, 2020 through September 2020. For more information on this assistance, visit the Federal Student Aid Office website.

Retirement savings

Another potential thing you could do with your stimulus money is to put it towards your retirement nest egg by contributing it to your 401(k) or IRA.

No doubt headlines about the drops in stock prices can be hard to stomach, but this also means that some stocks may be on sale. If a portion of your retirement plan is allocated towards stocks, by simply continuing to contribute, you’re in a position to take advantage of potentially lower stock prices. That’s because your contributions essentially allow you to purchase additional shares automatically.

Keep in mind that when markets are volatile, one potential risk is that stock prices might continue to fall. In times of economic uncertainty, it’s important to do your research and check in with a retirement advisor to discuss any concerns you may have regarding your retirement account.

We really are in this together even if we are spending our days apart. The economic fallout from the coronavirus pandemic has been devastating due to its sudden and far-reaching effects. We all probably know someone – a family member, a friend or a neighbor – who has been hard-hit by this crisis. 

If you’re among the people who have been fortunate enough to be able to continue to work and your overall finances are in good shape, you may want to think about donating a portion of your stimulus check to a relief organization of your choice. Or consider spending it at your local small businesses in a show of solidarity. You may even want to use that money to create a generous tip fund for the food and grocery workers who are delivering items to your door. Our nation’s essential workers are working hard for all of us out there, even when they may not feel safe to do so.

Want to learn more about the ways you can give back right now? Check out this "How to Give Back During COVID-19" article on how you can contribute.

This is a time to come together (in spirit) and extend a helping hand to those most in need. And when better days return, may we all look back and feel pride in the way we took care of one another.

Additional resources from Goldman Sachs

In addition to the stimulus check, the CARES Act provides more specific financial resources to individuals and small businesses impacted by the coronavirus. Want to learn more? Check out this article on how the CARES Act could help you. 

Visit our Covid-19 Center to find tips on how to deal with volatility, stick with your goals and take care of your financial well-being.

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