It seems like everyone in the YouTube personal finance community is currently doing a video on what you should do with the stimulus check from the federal government for COVID-19. So, if I set aside my skepticism that most Americans will actually see this money anytime soon and my theoretical debate as to whether or not I should even been getting a stimulus check (I am presently employed and was not laid off by my employer…) then my thoughts on how I would WANT to spend it are as follows:

1) Pay off University Student Loan 4 (USL4), which had an April 1st balance of -$663.25, at 8.00%, and a monthly payment of $30.00.*

2) Put the remainder in savings.

Shocking, right? Ugh. During my down time I have been watching so many folks on the Dave Ramsey plan pay off small balances and I must acknowledge that I miss that rush. While there are few worlds where paying off debt is a bad thing, paying off USL4 is probably not the wisest choice and my desire is mostly psychological. I think I have been bummed out realizing that while I will pay off PSL1 this year, I will have a zero chance of paying off PSL2, and should the current state persist into the summer, I will have no opportunity to earn additional side income from summer school/activity work. There was one major opportunity in particular that is likely gone now, however, they haven’t announced anything official. So with it seriously unlikely that I pay of PSL2, and while USL4 is with a very good servicer, freeing up the $30.00/month would be good, and give me a psychological boost. Ugh.

Even if the above scenario is the dream, more than likely, the following is what I WILL end up doing:

1) Putting a $1000.00 towards PSL2.*

2) Putting the remainder into savings.

*NOTE: This assumes the money is received AFTER I finish paying off PSL1. Otherwise, the money obviously goes there.

This scenario is much more prudent given that a much larger percentage of my payments on PSL2 go to interest than do my payments on USL4 even though USL4 has a higher interest rate. However, I still think there is some argument to be made for freeing up the additional $30.00 a month in minimum payments that I am currently making on USL4 and applying it to PSL2 payments or to the payments on another loan, like PSL3 where I currently pay more in interest than I do on principal…

Thoughts?