Getting a Stimulus Check From Your State? Here's How Dave Ramsey Thinks You Should Spend It

It pays to make the most of that money.

It's no secret that living costs are up across the board and that families all over the country are struggling to make ends meet. A lot of people depleted their savings in the early days of the pandemic, when job loss was rampant. And now, in the absence of having more money in the bank, many consumers are having a hard time keeping up with their bills.

The bad news is that there are no near-term plans to send out a fourth round of federal stimulus checks. The good news, however, is that some states are taking stimulus matters into their own hands.

A number of states have a surplus of funds in their budgets, and rather than keeping that money, they're distributing it to residents directly. Maine, for example, has plans to send out $850 stimulus checks. Meanwhile, residents of Indiana can expect a smaller, albeit helpful, $125 payment.

If you're getting a stimulus payment from your state, it's important to make the most of that money. And financial expert Dave Ramsey has some key advice on how to spend a stimulus check.

Good advice to take to heart

Last March, lawmakers approved a third round of stimulus checks worth up to $1,400 apiece. In the wake of that, Dave Ramsey gave out advice on how to put that money to good use. And so it's fair to apply that advice to any current stimulus programs happening at the state level.

So what does Ramsey suggest? Well, it depends on your financial circumstances. If you're out of work or have lost income, Ramsey suggests using stimulus funds to cover essentials like housing, transportation, food, and utility bills.

On the other hand, if you're not out of work and your paycheck is steady, you should use your money to shore up your finances by completing your emergency fund and paying off unhealthy debt. And if you're all set in both regards, you can consider using that money to save and invest for retirement.

Don't let that windfall go to waste

It's not every day that a stimulus payment comes your way. You may be tempted to take your state stimulus check and use it to splurge on something fun. But before you do, make sure your financial house is in order. If you've been dipping into your savings to cover rising living costs your regular paycheck can't cover in full, you're better off replenishing the funds you've taken out and waiting to splurge until your personal financial situation improves.

It's also worth noting that while living costs are up right now, they could climb even more in the coming months. Gas, in fact, tends to get more expensive during the late spring and summer. So even if you haven't been dipping into your savings to pay for essentials, that could change in the near term.

Eventually, inflation should taper off and living costs should settle at more moderate levels. But until that happens, it certainly wouldn't hurt to build yourself an extra savings cushion -- even if you think you're managing your current bills reasonably well.