TOM GJELTEN, HOST:

The coronavirus pandemic has hit the U.S. economy hard, throwing millions of Americans out of work. For some, a bit of relief will come when stimulus checks start arriving next week. Then they'll have to decide what to do with that money. But how do you make smart financial decisions at a time like this? We asked Tiffany Aliche, aka the Budgetnista, for some advice. She's a financial educator in Newark, N.J., and she began with the basics.

TIFFANY ALICHE: Maintain a strong cash position if possible, meaning that you should really be leaning into savings as much as possible, which means spending as little as possible - even places where it might not normally make sense.

GJELTEN: And as far as debt is concerned, you know, many people have credit card balances. They have student debt. They - you know, who knows what they may have? How do you prioritize which bills to pay, which debt to tackle first?

ALICHE: Before I even tackle the debt, I want you to call those people that you owe money to. I like to call those your service providers - so your student loan folks, your car note, your mortgage person, whoever that might be - and see if there's a program in place first because you might not have to prioritize payment. They might be waiving payment. So first, identify that.

And once you've taken care of the things that you might be able to push back or lower, then if there's not enough money to cover what you actually owe - so maybe your income has been reduced or eliminated because of this pandemic - then I would ask myself, is this something that I must pay for because I have to maintain my health and my safety? That comes first and foremost.

So although it's super-important - you know, you want the kids to have their cable. But if you don't have enough money at the end of the month, cable is not going to compromise your health or your safety.

GJELTEN: I think one of the things that you're saying that's going to be helpful to people - and it may even surprise them - is that you can sometimes negotiate with your creditors.

ALICHE: Absolutely - especially now. The answer is always no for a question that's never asked. If you don't ask for help, the answer is going to be no, so ask, ask, ask.

GJELTEN: Really important advice. Now, one big challenge that people may very soon face is how to spend that check, whatever size it may be, that comes with the stimulus relief package. What kind of advice are you giving people on how to spend that money?

ALICHE: One, pay what's due. So if you've been late on, you know, a payment because you lost your income, use that money to get as close to being on time as possible. So pay what's due. If there's not enough of that stimulus check to pay what's due, remember - prioritize by asking yourself, will I be unhealthy if I don't pay this, and will I be unsafe? And pay those first.

Two, I would save. While the goal is really to have six months of emergency savings, it's something, like, I like to call your noodle budget. And it's, like, if you had to eat ramen noodles - meaning that, what is the least amount of money you can spend to maintain your life? - that is your noodle budget. So that means your budget without the bells and whistles - only the necessities. And not that you have to live at that. But if you lose your income, you certainly would have to get down to that noodle budget until you were able to replace your income.

So if you already had that, then let's move on to No. 3. If your payments are up to date, if you have your noodle budget saved, then I would lean into my student loan payments if they're federal because right now, they've waived the interest, meaning that all of the money up until September 30 - all the money that you send to your student loan, your federal student loan provider, is going to go fully to your principal. So you have a unique opportunity to pay that debt down faster.

GJELTEN: That was personal finance adviser Tiffany Aliche. She offers more free advice on her website, thebudgetnista.com.

(SOUNDBITE OF CHAPELIER FOU'S "ORACLE")

Copyright © 2020 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.