Several states are offering their residents inflation relief checks ranging in amounts from $50 to $1,700. If you’ll be receiving money from your state, you should consider the options you have for its use and determine the best plan of action for you and your wallet.

                By                    Gabrielle Olya

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Here’s what experts say are the best ways to use your inflation relief check.

Pay Off Any Outstanding Bills

You should use inflation relief checks to pay off any bills you may have, said Andre Jean-Pierre, investment advisor at Aces Advisors.

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“Many Americans are feeling the budget punch of inflation as wages are not keeping up with prices of everyday goods and services,” he said. “I believe that using a short-term influx of cash to pay off bills would be wise because having missed payments on your personal credit profile could have long-term effects on an individual’s budget. If short-term influxes of cash were used to eliminate debt and interest payments, it could alleviate pressure on an individual’s monthly budget.”

Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth, also recommends using any influx of cash to pay off bills.

“The first step when you get extra money is to pay down any debt you have,” he said. “Paying down debt is effectively a risk-free return on the interest you would have paid. With credit card interest rates on the rise, paying off debt could save you 20% or more.”

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Save It

If you don’t have outstanding bills or debt, some experts recommend saving any relief payments you receive.

“In this marketplace, investing is not better than saving,” said Josh Answers, host of “The Trading Fraternity.” “This might sound odd to many, given that the answer to this question has been the opposite for the last 10 years, but things have changed with so much volatility and higher rates.”

Answers recommends putting money into an account that offers high interest rates.

“Shop around various high-yield savings accounts or CDs offered by your bank or credit card company,” he said. “If the Fed charges almost 4.5% for money, you should try to charge close to that.”

Invest It

Consider investing a relief check over saving it, said Robert R. Johnson, Ph.D., CFA, professor of finance at the Heider College of Business, Creighton University.

“If you have a long time horizon, prudent investing is always better than saving,” he said. “Counterintuitively, the biggest mistake many people make in investing is not taking enough risk. The surest way to build true long-term wealth for retirement is to invest in the stock market.”

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