Third stimulus check? What you need to know

President Joe Biden referred to the most recent $600 stimulus check as a "down payment." In keeping with his promise, Congressional leaders are working hard to pass a $1.9 trillion stimulus proposal that will include a provision aimed at putting $1,400 stimulus payments into more hands than previous payments reached.

Whether the $1,400 stimulus payments are passed as a part of a comprehensive stimulus bill or as a stand-alone is yet to be seen. Congress will be wrestling with many issues that may cause an unwanted delay in getting this new payment out into the economy, but the prevailing rhetoric at least is to see this third injection much sooner as opposed to later.

As with the first two stimulus checks, the total to be received per person will depend on a variety of factors such as adjusted gross income, classification of a dependent and a host of other qualifiers.

We do know that President Biden is intent on expanding eligibility for the third stimulus check to include dependents of any age and families with mixed citizenship status.

If you don't have to use your stimulus check for basic needs, here are some considerations that you should make:

• Beef up that emergency fund: 2020 has taught everyone to expect the unexpected. Having 3-6 months of living expenses in a savings account is key.

If you aren't there yet, earmarking your stimulus check for your emergency fund can create some real peace of mind.

• Pay off those high APR credit cards: Over the long term you can't out-invest high interest rates on consumer debt. Once you've secured your emergency fund, look to pay down your unsecured debts utilizing one of two tested "in the trenches" ideas: 1) the snowball method; or 2) the avalanche method.

With the snowball method you list all of your debts from smallest to largest and you allocate everything you can to the smallest balance while making the minimum payments on the others until all the debts are cleared. With the avalanche method you list your debts from highest APR to lowest and follow a similar pattern of paying all that you can on the highest interest rate debt while making minimum payments on the others. Find the method that fits your psyche and get working.

• Fund your future retirement with an IRA contribution:

You have until April 15, 2021, to fund a traditional or Roth IRA for tax year 2020. The maximum contribution is $6,000, but those over the age of 50 can make a "catchup" contribution of an additional $1,000 for a total of $7,000. Even if you can't max out your IRA, making a $600 contribution is a great move to make and your future self will be sure to thank you.

• Make a down payment on education: Contributions to a 529 Savings Plan are the best way to save for higher education expenses. Not only do 529 Plans provide for tax deferred growth and tax-free withdrawals for qualified expenses, but many states provide generous state tax deductions for contributions made.

• Make an impact: If your financial picture is in good order, strongly consider using your stimulus check to help those that are in need. The impact of COVID-19 can be felt all throughout your community and making an impact just feels good and your tax return likes it too. There's a new above the line deduction for up to $300 of cash donations even if you don't itemize.

Whatever your financial situation might be, use the time between now and when the stimulus checks actually arrive to make plans with how to best allocate yours.

• Craig Bolanos is CEO and founding partner of Wealth Management Group in Inverness and Downers Grove.