Hi, Helaine: The government deposited the $1,200 check we are getting to help us get through the coronavirus lockdowns and shutdowns in my checking account. No problem. My question is about what I should do with the sum.
I am working from my condo, and my position seems secure, but I know anything can happen, especially if this lasts into the fall. I have some emergency savings set aside, but not the recommended three months of it. I think I should put this check there and not think about it again.
But one friend says I'm fine while millions aren't, and I should give the money to a local food bank. That's what she is planning to do. Another gal pal says she's going to use the money to stimulate the economy, so she will order in dinner from restaurants that are still open, buy a dress on Poshmark and things like that. What would you do? -- Spend or Save
Dear Spend or Save: This is a really good question. As you are discovering firsthand, there are many ways to answer it. None of them is wrong.
It is good to buttress your emergency savings, especially when, like you, you don't have enough of it -- and I would say that even if we weren't living through a pandemic-fueled mega recession. Giving to charity is also a good thing to do. Your friend is right. Food pantries are seeing overwhelming demand from people less fortunate than you, even as the pantries' financial resources are lacking. They do need help.
Finally, it's also good to spend the money in a way to help businesses that are really suffering right now, which is what it sounds like another of your friends is doing. Here's the great thing: This isn't an either/or choice. You can do all three. You can divide the money up in such a way that some of it goes to emergency savings, some of it goes to charity, and some of it goes to supporting local entrepreneurs. That's what I would recommend.
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