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Asset manager shares tips on how to use federal payments

For many, the $1,200 will go straight toward bills. For others, an asset manager says there are opportunities

FORT WORTH, Texas — Across the country, millions of Americans are receiving or awaiting payments from the federal government.

Anyone who made less than $75,000 last year or married couples with up to $150,000 in income will receive $1,200. The Federal Government anticipated 80 million Americans would receive payments by Wednesday.

Spencer McGowan is the president of McGowan Group Asset Management in Dallas, and his children are unemployed due to coronavirus layoffs, so they put the money toward rent.

“At least they can pay some of their bills or hopefully all of them,” he said. “We were like, ‘Thank God they’re going to get it.'”

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For most, the federal deposits will be used the same way as for McGowan’s children, going straight toward food and bills, but he has tips for those who don’t need to spend it immediately.

First, make sure you have enough saved up.

“If you don’t have 90 days’ worth of expenses in the bank, that’s exactly where it should stay,” he said. “We’ve all heard that principle, but even I have violated that principle at times.”

Anyone making up to $99,000 will get at least some payment and that doubles for couples, so some may already have savings. In that case, he suggests putting it toward paying off high interest debt. 

“If you’re paying more than 5% on anything, that’s a great destination even if you have 90 days’ worth of cash,” McGowan said. 

For others, it may be possible to invest some of the money.

“We’re finding bargains that we haven’t seen since 2008 and we recovered from that in less than nine months,” he said.

That means increasing contributions to company 401k plans or even picking out a couple stocks.

“Raise that percentage to the 401k if this would’ve been spent money instead of going on Amazon and buying $1,200 worth of toilet paper,” McGowan said.

He says it’s OK to set aside $100 or $200 to put toward a flight to visit family members for later on, but more should be saved.

For many, the money is just enough to hold on. McGowan says don’t lose hope.

“This too shall pass,” he said. “In a year, we’re going to be in a much different situation.”

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