LOUISVILLE, Ky. — Some of the federal stimulus checks have gone out in the mail; others, have already hit Americans’ bank accounts. One financial advisor with Strategic Wealth Designers in Louisville is offering a few free tips on how to make the most of it during the coronavirus pandemic.
As part of the economic stimulus package, a person who has a social security number and makes less than $75,000 in adjusted gross income annually will receive a $1,200 check. Payments will vary beyond that.
As many Americans wait for the money, financial advisor Josh Smith expects many of his clients will save a large portion of it. He says there could be a spike in spending to boost the economy, at first.
“I know for a lot of people that I’ve talked to, you know many of them are going to put this back in savings into a rainy day fund,” Smith says. “You know, one of the first recommendations that we make is you always want to make sure you have at least 90 days of your living expenses sitting in cash.”
For the families that face financial uncertainty, Smith advises waiting to purchase any big-ticket items.
However, “if you’ve already got that liquid savings of that 90 days, then you may look at investing that or maybe you know doing that home project that you’ve been looking to do.”
In another tip, Smith advises clients to follow “the rule of 100.”
“Ideally, you take your age,” he explains. “So, say someone is age 60 perhaps. Ideally, you want 60% of your assets in a completely safe position — where they can’t go down in value. Then, the other 40% if you want to put those in the market or other positions where they can go up and down then you can do that. But we always wanna operate by that rule of 100.”