LAFAYETTE, Ind. (WLFI)- We are starting a new segment here at WLFI called your money matters. Each week we will consult a financial expert on ways to get the most out of your money. This week our financial expert discussed what you should and should not do with the next stimulus check Americans are likely to get. Some people may want to use the money to buy something nice, but financial experts say that is the worst thing you could do with it.
"You don't want to use it to buy something that is going to put you further in debt,” said Nick Royer a Master Registered Financial Consultant. “Some people may be thinking 'oh I can just take that and I can put it into a car' but a car is going to be an added expense but right now that what people don't want."
Instead, Royer says the first thing you should do is save it. Especially if you do not currently have money saved in an emergency fund. Second, you should use it to pay off debts that you currently have or use it for things you absolutely need. However, if you have both of those areas covered, Royer says you should invest it. Depending on your age how you invest should vary.
"If you are a much younger person then maybe you can be in the stock market because you can weather the ups and downs of that," said Royer. "You have a lot of time before you actually get to retirement. "
If you are retired, Royer says diversifying your investments is the best option.
"Take some of that money and invest it in the market in a diversified portfolio using a lot of index funds and things like that so you are well diversified no matter what happens in Washington or Wallstreet," added Royer.
Royer went on to say that about 95 percent of retirees only have a few thousand dollars saved in cash. That's why he says having a solid emergency fund is even more important for people who are retired. Most importantly though he says to not treat the stimulus like free money. Use it for a purpose. He says if you are comfortable enough financially donating it to a worthy cause is also a good use.