I’m a Finance Expert: These Are the Worst Ways To Spend a Stimulus Check
Written by
Cindy Lamothe
Edited by
Amen Oyiboke
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Getting a stimulus check is an exciting moment full of questions: What should you spend it on? Should you be responsible and pay down debt or use it to finance a fancy new car?
There are so many scenarios, but not all of them are right.
GOBankingRates spoke with finance experts Angelo Crocco, CPA and owner of AC Accounting, and Andrew Gosselin, CPA and senior contributor at Coupon Mister, to discuss the worst ways to spend your stimulus check.
“When a stimulus check comes in, the first thing that comes to mind might be what to buy or where to spend it,” said Gosselin. “That kind of thinking, though, can set you up for trouble later.”
He noted it’s easy to get caught up in the excitement of unexpected money, but the key is to approach it with a plan.
“Without one, you risk wasting the opportunity to improve your financial situation.”
Here are four things experts say are the no’s of spending your stimulus check.
Spending On Things You Don’t Need
The biggest mistake, according to Gosselin, is spending on things you don’t need.
“Buying the latest gadget or splurging on a vacation might feel great in the moment, but it doesn’t take long for the regret to kick in when real financial obligations start knocking.”
He said it’s smarter to step back and think about the basics — rent, utilities, food.
“If those aren’t covered, that’s where the money should go first. Missing a rent payment or falling behind on a bill because the money went somewhere else isn’t a situation anyone wants to face.”
Chasing High-Risk Investments
One big trap is using a stimulus check to chase get-rich-quick schemes, said Crocco.
“People see social media hype around meme stocks or new cryptocurrencies and throw their entire payment into something they barely understand.”
He said this can be a fast route to losing money.
“While high-risk assets might pay off if you know the market and have spare cash, a stimulus check is often meant to bolster basic financial security,” he said. “It’s better to set up an emergency fund or pay down debt before taking wild chances.”
Over-Committing to New Monthly Bills
Another overlooked mistake, said Crocco, is using the check to start pricey subscriptions or take on new financing plans that pile up.
“It might feel good in the moment to upgrade your home entertainment or buy high-ticket items on installment. But once the stimulus check is spent, you could be stuck with ongoing payments that strain your monthly budget.”
He observed that when someone on a tight budget suddenly has extra money, it’s easy to forget that recurring bills don’t go away.
Ignoring Existing High-Interest Debt
“I see people spend a stimulus check on lifestyle upgrades instead of tackling credit card debt or payday loans,” said Crocco.
These debts, he explained, can carry interest rates so high that you barely make progress with minimum payments.
“Even a small chunk of money directed at these balances can save hundreds in interest over time. By skipping that opportunity and using the check for non-essentials, you might end up paying more in the long run and that defeats the point of a financial boost.”
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