You are entitled to receive $1,200 per Single Taxpayer that doesn’t make more than $99,000 per year, and $2,400 per Married Filing Jointly taxpayer that doesn’t meet $150,000 per year between the two. Additional to this, each kid in the family, you will receive $500 per kid of financial aid. This is not only for the unemployed; it is for everyone. Even foreigners like myself under the H1B status!

My question is: Now that you have some extra money, what should you do with it? DO NOT SPEND IT! Hear me out here!

There are several options depending on where you stand: 

If you are employed or unemployed and you have no emergency fund, this money (all of it or partial) should be to start having one. Don’t rush it, the 6-month emergency fund is not done in a day or two. You start saving little by little until you get to the amount you need to survive for 6 months. 

Let’s say you receive $2,400 plus $1,000 for two kids. That is a total of $3,400. You are a lucky one and are still employed. You can pay for your Rent/Mortgage, Car, Food, etc. Well, in this case, I will recommend you put that money completely into Savings into a Money Market Account. This account will be FDIC Insured (you will not lose money if the market keeps dropping) and will give you slightly lower return than inflation (1.5%). 

An amount of $3,400 will not be an emergency fund for you for a family of 4. Your Fixed and Variable expenses should be in a range of $4,000 - $5,000 per month. Maybe you are super controlled and are in a range of $3,000, which I doubt it. It doesn’t matter! You start with one-month savings, which is great! You can continue from here and keep saving. Have you received your TAX RETURN? That can be another month or two of emergency fund. 

If you are one of the 3.5 million Americans claiming unemployement, then your situation is different. You have to satisfy your basic needs and add up the unemployment money ($800 per month) with this help from the government ($1,200 or $2,400 plus kids). 

Do not think of the emergency fund. You need to survive through this. The important thing here is to DOWNSIZE and be FRUGAL. If your budget in my SPREADSHEET says that you are spending $5,000 per month on all Fixed and Variable expenses. Well, you don’t need $5,000 in times of despair!

You need to eliminate all Shopping, all Entertainment, all Restaurants and Bars, all Expenses that are not 100% NECESSARY! You are in SURVIVAL MODE! Maybe your number after all this cuts is not $5,000 per month but $2,800! Then, you are in a much better place with your money!

Forget about going out, forget about vacations, forget about shopping, forget about changing anything that is old, forget about luxuries. You are in UNEMPLOYMENT and SURVIVAL MODE. Even if you HAD an Emergency Fund, you have to make it work so you don’t overspend and run out of money!

This is the best place to be. This is where I am today. I am employed, I have an emergency fund in place and I am still getting $2,400 from the government. Well, in this case you can do two things:

You can get the money and just add it to your Investment Money. You can put it in your High-Yield Savings account, or in an investment you have in Wall Street such as a Low-Cost Index Fund Long Term. 

You can also invest in Oil Funds (ISO) which right now are super low, and will eventually go up and make you a lot of money. I came in and placed some money in Oil Funds myself, but I will leave them there untouched until December when I get my new Rental Properties!

Whether you are in Situation 1, 2 or 3, you have to control your money you are getting from the government and NOT SPEND IT! 

If you spend the money on stupid stuff you are going to end up worse than you were before. You can combine your TAX RETURN with your FINANCIAL AID and make it a wonderful chunk of money to start having an emergency fund! If you already have an emergency fund, then start by putting some money in an investment in Oil where you know if will get better in the next 9 months!

I encourage you to be better with your money and stop being average. The average person will go and buy a 75’’ TV and spend all the money from the government. They will be hoping they will receive more in the next months if they get laid off or cannot get another source of income. 

My side hustles are paralyzed now, there is no wiggle room to make more money, and things are going to get worse in April. I recommend you save all your money and put it where it is protected. I don’t want you to be in a position where you must start selling your stuff to make ends meet!

Please follow my advice and you will be successful in this crisis! Download my spreadsheet and BUDGET your income and downsize as much as you can! Have a Great DAY!