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The Best Way to Spend Your $1,200 Stimulus Check

13 Dec 2024 6 min read

Have you received your stimulus check yet? According to IRS Commissioner Chuck Rettig, “Tens of millions of people across the country are receiving these payments, and millions more are on the way.”

How are you going to spend it?

Listen, this may be an unpopular opinion, but $1,200 in and of itself is unlikely to change your life. However, as a real estate investor (or someone aspiring to be), you can spend this money productively—you just need to be strategic about it.

For example, it does me no good to have a sharp axe if I do not know how to use it. Past using the axe, if I do not know how to sell the wood I plan on cutting, it was all pointless. These materials have no value to me unless I know how to use them—either to keep me warm or make money from them.

I guess what I’m trying to say is that money spent thoughtlessly will provide no return.

OK, moving on to my opinion on how to invest the money. Here are three ways that as a rookie investor, I would recommend spending it.

And one last thing—if you are about to lose your house or don’t have money to eat, please use it for those things first. Food and shelter should be your number one priority. But if you have those bases covered, this is what I recommend doing with $1,200.

The Best Way to Spend Your $1,200 Stimulus Check

Pretty casual thinking woman in glasses looking up on blue background with empty copy space

Invest, Read, Apply ($200)

1) Invest in a book that correlates to your goals! Sure, books cannot generate hard cash for you, but they can provide the wisdom you need to reach a goal. In fact, the right book may amount to infinite returns for you down the road.

Just like an investment property will provide cash flow if you buy correctly, will provide equity the longer you have it, will teach you lessons (some fun and some not so fun), it’s the same thing with a book. So, invest in one that correlates with your goals and reap the rewards down the line.

2) Read it, listen to it—do whatever you have to do to get through it. Don’t be foolish and think that you can figure out anything and everything on your own; none of us do. We all seek wisdom from books (and from mentors—some who are authors!). I have never met a successful person who hasn’t mentioned that they love to read or that they make it a priority daily.

Choose something certain to guide you toward what you are trying to achieve. For example, if you want to learn to flip homes or invest out of state, you can pick up related titles in the BiggerPockets Bookstore.

Say you’re not the greatest at _______ (fill in the blank). Someone, somewhere, who is one of the best in the world at it, wrote a book about it. Go find that book!

3) Apply the knowledge that you read in your book of choice. This is absolutely the most important part!

I’ve met so many people through real estate investing who buy books, read them thoroughly, yet never apply the wisdom they just acquired. Apply the knowledge from the books you read, and you will see growth!

_ Related: _

Create an LLC ($500-$750)

LLC written in blue marker on a spiral notebook laying on desk with small potted plant and other desk decor

Another productive way you could spend your stimulus check is to create an LLC and a bank account for your business. Whether you are looking to start a lawn care company or build an app or whatever it may be, creating an LLC is a smart business move. It shields your personal assets, offers tax advantages, legitimizes your business with the state, and so on.

Hire a CPA (Cost varies)

You could also use your check to hire a good CPA. The price of this will vary—but any amount is worth it. I don’t think you can put a value on a good CPA—one who is going to do more than just your taxes.

A good CPA is many things. I will highlight three:

1) Your friend. Yes, a CPA will be your best friend in making the right financial decisions, many of which affect your business when it comes tax time! I run all financial decisions past my CPA to ensure they align with my goals and I understand the full scope of their impact.

2) Your worst enemy. Your CPA will also be your enemy when it comes to bad decisions that you thought were good. If you have properly explained your goals to your CPA and then ask him/her later in the year if you should buy that house or flip this property, a good CPA will give you advice based on the numbers and tax implications, not what you want to hear.

3) Your sword. Your CPA will be the sword that wins you battles or that ends up taking you out. Your CPA, if you hired a good one, will be there if Uncle Sam comes knocking at your door. Your CPA, at the end of the day, will be the reason you keep or lose the money you made that year. It does you no good to make a whole lot of money if you have to pay it all back in taxes!

So, those are my recommendations. If your bills are still getting paid, sure, you could order takeout or buy some new clothes or blow your stimulus check on something that will provide instant (and temporary) gratification to you. Or—you can spend it strategically and reap benefits worth exponentially more than $1,200.

How are you planning to spend your stimulus check?

Share below!