Many Americans are already beginning to receive their $1,400 relief payments, which were part of the $1.9 trillion economic relief package President Biden signed into law March 11.

The legislation provides a direct payment of $1,400 for a single taxpayer, or $2,800 for a married couple that files jointly, plus $1,400 per dependent. Individuals earning up to $75,000 would get the full amount. Those filing jointly with incomes of up to $150,000 would also get the full amount.

Brian Littlejohn, a financial advisor for Sherwood Investment Management in Glenwood Springs, said the money should be put away in an emergency fund, put towards retirement or used to pay off high interest rate debt.

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Paying off high interest rate debt is most important, Littlejohn said.

“If they have any high interest rate debt they should pay that off, put that money toward that. Especially credit card debt, not so much like mortgage debt or car loans,” Littlejohn said.

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High interest rates are anything over 8%, he added.

“If there’s something where they have an outstanding credit card balance, that can become bad. It becomes very hard to dig yourself out, especially if you’re in a high balance place,” Littlejohn said.

Building up an emergency fund is also a wise way to invest.

“In one of those funds you want to have three to six months worth of expenses in cash or cash equivalent,” Littlejohn said.

“After that, I would encourage folks to think about socking it away for retirement.”

Littlejohn said he encounters a lot of folks in the area who just don’t have enough saved for retirement.

“In a lot of cases it’s because of the high cost of living. They spend so much money for housing, medical costs and groceries, their saving for retirement suffers,” Littlejohn said.

“Beyond that it’s just so individualized, those would be my general answers.”

Danielle Howard, a financial planner with Wealth by Design, said each person needs to take a look at their personal financial situation before deciding what to do with their relief funds.

“The first step is take a deep breathe and look at your financial situation. Ask yourself, what is the best use of this money. Think it through,” Howard said. It may be to pay down debt, it may be to invest, or help a family member out. It may be to give it to a non-profit organization as I’ve seen an increasing number of my clients give the money away to non-profit organizations.”

Howard said she’s seen other people help family members out, while others have put the relief checks into their retirement accounts to invest for the long term.

“Just think it through, don’t go on your first whim,” Howard said.

smarvel@postindependent.com