How will you spend your stimulus check money?Sarah Tew/CNET

6 ways to spend your stimulus check, however much money you receive

We have some tips on how to stretch your stimulus check as far as possible, whether you're still collecting a previous payment -- or planning for the third.

by · CNET

If everything goes according to plan, the IRS could start sending out the third round of stimulus checks of up to $1,400 each by the end of March. That's the timeline the House and Senate are working with to pass President Joe Biden's $1.9 trillion relief bill.

Those payments should arrive just a few months after the $600-per-person checks Congress approved at the end of 2020. While most of those who qualified should have received those second payments already, the IRS has said that millions of people are still missing their checks. If you haven't received yours yet, you can claim it now as a Recovery Rebate Credit on your 2020 tax return, even if you're a nonfiler or someone who doesn't normally file taxes. (Your possible third stimulus check may also be affected by your 2020 tax filing.)

2021 Bloomberg survey shows nearly two-thirds of respondents plan to spend their stimulus checks immediately, while a little over one-third plan to save it. Whether you received your stimulus check already, are waiting to get your payment through a tax refund or are looking toward a third stimulus check (here's who might be eligible), here are six ways to make the best use of your payment. 

Address your most urgent needs first

Before anything else, make sure your immediate needs are met. This includes food, monthly bills and rent or mortgage. But before you prioritize rent over, say, food, consider that many jurisdictions, utility companies and even banks are offering relief due to the pandemic. See which programs you can take advantage of, then allocate funds accordingly. For example, President Joe Biden extended the eviction moratorium until March 31. 

Set some funds aside to help pay your 2020 taxes

Tax season has begun, and it's clear that the IRS will not postpone tax filings like it did last year. This means taxes will be due in two months at the latest. Stimulus checks will not be taxed, according to the IRS, but unemployment benefits will be. If you don't need to use the money immediately, keeping it around to help with your taxes will help lessen the sting when it comes time to pay.

Knock down your credit card debt and loan balances

One way to secure your financial future is to reduce your debt. A significant payment made to pay down a credit card and loan will help reduce the amount of interest paid on an account carrying a balance. The less interest you have to pay, the more funds you'll have available in the future. But before you do that, check with the debt holders because some are offering relief, including deferred payments and waived interest. Just be sure to read the fine print, as some of the assistance offered could delay interest rather than forgive it. 

Start or add to an emergency fund

It can't be stressed enough how important it is to have an emergency fund. As this pandemic shows, the world can change very quickly. The fund should be equal to the amount of money spent on expenses for three to six months. While the stimulus check won't cover that entire amount, it can be used as a starting point. If you dipped into or even exhausted your emergency funds, the stimulus check can help get you back on track. A simple savings account can be used to keep the money safe. 

Gift some or all of it to those in greater need

Those fortunate enough to find themselves not needing any of the money for themselves should consider giving it to people who do. There are many charities still fighting the pandemic, such as food banks and hospitals. Another consideration is to help out friends and family members who've been hit hard by the pandemic. 

Open a long-term investment account for a child in your life

Part of the relief package provides an additional money per child. If your family is already comfortable, there's a way to make use of that money to help your kids' future. 

"Provided you don't need this money, consider opening a 529 plan for your child," said certified financial planner Marguerita Cheng. "Your state may offer a tax benefit. This money can grow tax-free. If appropriate, you can even contribute modest amounts of, say, $50 to $100 regularly."

To start a 529 plan, contact your bank or investment firm to see what they have available and what benefits will come your way if you open one.