Second Stimulus Check: How to Make the Most out of Your Next Payment, According to Finance Experts

Christian Long

07/31/2020 12:36 am EDT

On Monday, the Senate introduced the first draft of the proposed HEALS Act. The second stimulus package aimed at providing for economic relief during the coronavirus pandemic, the proposal aims to help. Like the CARES Act before it, the bill would guarantee a second $1,200 stimulus check to any individuals who meet the slightly lower income threshold.

Despite the current inaction, most recently by the noted failure to extend the CARES Act's unemployment benefits, top lawmakers on both sides of the aisle have insisted a second (and likely final) payment package is on its way... eventually. As far as what to do with this potential second payment, CNBC Select spoke to Sallie Krawcheck, the co-founder and CEO of the digital investment platform Ellevest, for some advice. She also took into account the varying positions people might be in financially. Essentially, she offers advice on how to spend the money wisely.

Of course, once the Senate manages to draft a version of the CARES Act that passes, it has to get voted on by the House of Representatives, then onto the desk of President Donald Trump. While it may not happen anytime soon — or could come in a series of smaller packages — here are Krawcheck's recommendation for what to do with that second stimulus check, whenever it arrives.

Paying the Bills

(Photo: ADEK BERRY/AFP via Getty Images)

Most importantly, Krawcheck recommends using the stimulus money to catch up on the most urgent bills and other utilities. "If you or a loved one need it to pay the bills right now, use it," she said. "That's what it's for." She also recommended talking with lenders and other companies for possible financial assistance, which many are offering right now.

Bracing for Impact

(Photo: Spencer Platt, Getty)

For those who are bracing for a possible loss in income, and have a decent amount saved up, Krawcheck suggested saving the money. She also suggested shopping around for accounts that are insured by FDIC or NCUA and easy to access like a high-yield savings account.

Credit Card Debt

(Photo: Joe Raedle/Getty Images)

For anyone burdened with high-interest credit card debt, Krawcheck recommended paying those bills down before shifting to saving. "If you have debt with interest rates of 10 percent or more, we recommend NOT saving it," she explained. "Instead, use it to pay off that debt."

Investing

(Photo: Jeff Fusco/Getty Images)

As far as recipients who aren't in danger of losing income and aren't weighed down with credit card debt, Krawcheck suggests investing the money as a possibility. "That's when we'd recommend investing the money," Krawcheck said, referring to anyone with three-to-six months worth of income stashed away. She also recommended researching investments for one that will fit individual needs.

Opposition

(Photo: Tasos Katopodis/Getty Images, Getty)

The main problem with the second stimulus package is the utter deadlock it appears to have created in the Senate. Despite being crafted by the GOP-controlled Senate, at least 20 Republicans have insisted they'll vote "no" regardless, meaning to pass it will need significant Democratic support to pass — before it gets to Trump's desk.

Conclusion

(Photo: Valentyn Semenov / EyeEm / Getty Images)

Essentially, the smartest move, according to Krawcheck, is to pay off as many bills as possible, including credit cards, which can save more money in the long term when factoring in the accrual of high-interest balances. For anyone who is well off amid the pandemic, investment comes highly recommended, albeit with an account that allows easy access in the case of an emergency.

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