Why Would a Frugalista Who Hates Her Mortgage Spend a Stimulus Check?

I hate my mortgage. If you’ve read my blog at all, you’re probably acutely aware of how much it eats away at me on psychological and emotional levels. You also probably know that I can be the queen of frugal, even if it makes things downright awkward. So why in the world would this frugalista who hates her mortgage spend her stimulus check?

I’m glad you asked.

The short answer is I can and I should.

Here’s why:

What is the point of a stimulus check anyway?

It’s tax refund season and most of us are refreshing our bank accounts for not one, but two reasons. You’re waiting to see when your refund hits and when your stimulus check clears. Or at least I am. (We are currently 1 for 2 with a pending tax refund.)

While it’s true that the stimulus check is a tax credit, it isn’t actually designed to be Tax Refund Part Deux. Instead, the purpose of a stimulus check is to stimulate the economy. For some people–OK, fine, me–you don’t have to tell me twice. It is my civic duty to go shopping. GOT IT. In fact, I’ve been daydreaming about what I’m going to do with this money since I first heard about it. But many people are not totally clear on why Uncle Sam is throwing $1200 our way.

In times of crisis, people get conservative with their money. That’s a good thing. Until it isn’t. By giving people a stimulus check, the government is hoping to coax consumers into spend a bit, especially when local economies are struggling so mightily right now. More or less, a stimulus check is a license to spend. 

If you want to know more about your stimulus check, Marketwatch busts some common myths here. 

So everyone should spend their stimulus check?

That would be a no. I absolutely believe that it is crucial that everyone put on their own oxygen masks. You’ll be much better suited to help yourself, your family, and your local economy if you have a place to sleep and food to eat. Definitely cover your basics and put some cash away if you don’t already have savings.

As someone who lost her job twice in the last recession, I know that I will never sleep well unless I have a beefy emergency fund. In the past lives (AKA February), there would have been plenty of people telling me that having an emergency fund our size was ridiculous. But not only can we not predict the timing of an emergency, we can’t predict the scale.

And this one is a doozy.

So, no, not everyone should spend their stimulus checks. At least not all of it. You want to do what you can to have your basic needs met (though everyone except Mnuchin knows $1200 isn’t going to do it all) You also don’t want to spend all of your stimulus check if you don’t have a cash cushion to help you sleep at night. Think of it as the world’s most comfortable metaphoric pillow.

Why are you spending your stimulus check?

I am making two choices with my stimulus check: I am not using it to pay down additional debt, and I am also not using it to invest.

Normally, in the event of a windfall, we do three things:

1. Put a bit of money toward something we want or need. If there’s a house project we’ve been putting off or a travel fund we want to grow a bit, we do that.
2. Invest some in our Roths.
3. Pay down our mortgage.

Truthfully, the third option is most thrilling for me. Nothing makes me more excited than seeing what a difference a little extra or even a triple mortgage payment does to our principal.

RELATED POST: How $39 Changed Our Mortgage Payoff Journey Forever

But that’s not what we are doing here.

Don’t get me wrong. This doesn’t mean that I am forgoing saving, paying down debt, or investing. We will continue to move at the pace that works for us and for our situation. Because our school district will not start to bear the burden of this financial crisis in its budget until August, right now our regular personal budget remains unchanged.

We will save, we will invest, we will pay down debt. But not with the stimulus check.

I would love to wake up in a paid-for house. It is the stuff of my daydreams. The stimulus check, of course, isn’t enough to make my money fantasy come true, but it could slash three payments off our mortgage journey. That’s significant, considering how important our house is to us and how far we’ve come on the payoff journey. 

But what I love most about my home isn’t just the house itself. It’s the community.

I want to be able to teach my son to ride a bike one day and end up at our ice cream shop. I love knowing that we can get the occasional Chinese takeout right down the street. Goodness knows my dad stopped at our local pizza joint every day he came to visit me on my maternity leave. Fine. He was visiting the baby. But at least I got pizza or a sandwich out of the deal. Being surrounded by small businesses is wonderful and delicious, and I want that to continue. 

We also value our schools, and we love our park district. Even though the world is undoubtedly going to be different after this crisis, we hope that kids and families will get to enjoy the same quality of both of these things for decades to come.

Our neighbors matter to us. Even the ones whose dogs never stop barking. Not only do they own local businesses or work for big companies that could use our support, some of them are served by our food bank and other local community organizations. If we can strengthen those, we can strengthen our neighbors.

In short, we want our community to thrive and succeed. So as much as I want to pay off my house and have a comfortable retirement, I want to help my community even more. To do that, we are using the stimulus check to buy things and make donations, instead of investing or paying down debt. 

What are we doing with our son’s stimulus check?

Initially, I thought that I would set aside the $500 we received for our son. That would mean either putting it in savings or investing it. I take being a steward of my son’s money seriously, so I want it to be there for him when he wants it.

But then I realized he does want it. And he wants it now.

If you asked my toddler what he misses the most during this pandemic, he would tell you the names of my in-law’s dogs. Then, he would mention both sets of grandparents and his preschool teacher.

But he has also cried and stomped around at the mention of closed playgrounds, libraries, museums, and even IKEA. (What can I say? He loves ice cream.)

Rather than squirreling his money away, we will help him spend it on experiences he wants or things he needs. When our park district reopens, I know there will be all sorts of classes and activities he would love to rejoin. He can’t wait to go back to the children’s museum and the wildlife rehabilitation center. We are also holding out hope that we can go back to the county fair with my parents this fall.

Because we are in a place of relative security, we are going to spend this money. We will be cautious, we will be thoughtful, and we will be going to Peppa Pig World of Play if and when it finally opens.

So Tell Me…Are going to get a stimulus check? Has it already hit? What are you planning to use it for?