HARLINGEN, Texas (KVEO) — Hundreds of thousands of Americans have already seen the latest round of stimulus money in their bank account as checks started going out over the weekend.
If you claimed dependents in your most recent tax filing, that amount is multiplied.
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The $1.9 trillion American Rescue Plan offers the largest stimulus check to date. A key feature in this latest round? A check for each of your dependents.
If this money comes as a pleasant surprise and your families’ needs are already being met, $1,400 is a good chunk of money to begin investing for your child or dependent’s future.
Economist Teo Sepulveda said there are several options worth considering based on your goal — a long-term or short-term investment.
He says stocks aren’t the best option for people starting, but if you’re willing to have patience it could bring a solid return.
However, the safest thing to do to ensure the money does grow is to take it to a bank.
“Just locally take it with the one that gives you the highest rate,” he said. “Go open a savings account, even if it stays small, that gives the family the comfort that there’s money there growing even if it’s little for long-term plans the family needs to achieve their goals.”
He adds another worthy investment is spending it on home improvement, which will raise its value once you decide to resell and benefit the entire household.
For older children, Sepulveda said this presents an opportunity for them to learn financial literacy and decide how to spend it. But you do want to offer some guidance.
“Try to spread it out in four or five —it can be weekly or monthly, depends on the family — (payments),” he said. “Make sure they start low, then spread it out to make sure the last one is the one that has the highest payment.”
Doing so, he says, teaches them the lesson that waiting often leads to a higher return. And if they’re entrepreneurial-spirited, he recommends they use it to start, invest into and promote a business they can manage—whether its mowing lawns or baking cupcakes.