How should you use your next stimulus check or 2021 tax refund?

Anna C Johnson
2 min readFeb 20, 2021

It’s that time of year — tax return season. And this year, there may also be a third stimulus check coming sooner rather than later.

If you feel a sense of dread or overwhelm at the thought of taking a deep dive into your finances, you’re not alone. The best way to make those feelings disappear is to take action.

This last year has been such an interesting time financially for so many people. If you’re wondering how to best use your tax refund and the next (last?) stimulus check, keep reading.

Know your financial status.

Review your credit report and make sure nothing looks out of place. Your credit report is a complete report of your loans, debts, and more. It’s much more than just your credit score. Know which of your debts have the highest interest rates and balances, as those are heavily affecting your credit score. Map out your monthly income vs. your debt payments and see where paying debt down might make the biggest impact for you.


Whether you should spend or save your money depends not only on your own specific financial situation but also on your preference.

If you owe more in expenses monthly than you make in income, you may want to pay down debts so you don’t have a negative monthly income (you’re going into debt deeper and deeper each month).

A simple rule of thumb from Dave Ramsey is to have $1,000 saved for emergencies before focusing heavily on paying off your debts.

If you have money left over each month after your expenses and you have an emergency savings fund — you’re doing great! Now you can decide if you want to focus on paying down debts, increasing or savings, or a combination of both.

Buy yourself a small treat.

Emphasis: small. All work and no play could make you feel more inclined to binge spend later. Get yourself something simple or small that you really enjoy and use the rest to better your financial situation, whether that’s paying down debts, adding to a savings account, or even investing and bolstering your retirement account.



Anna C Johnson

Wisconsin-based freelance writer and blogger passionate about lifestyle, real estate, personal finance, and home/life organization.