A $ 1.9 trillion stimulus package has just passed. How to use the money for help

Many people’s budgets look very different during Covid.

Unemployment benefits and direct payments have replaced wages in the income register.

For many, this help is still not enough, and food and rental assistance as well as protection against eviction have also been needed to keep families afloat.

Fortunately, more relief is now on the way. President Joe Biden signed a $ 1.9 trillion stimulus package on Thursday.

Here’s the help you can expect to see soon and how experts recommend using it best.

Unemployment benefits will be extended through Sept. 6, with a $ 300 federal increase in addition to any state benefits. The average weekly check is about $ 324.

Between state benefit and growth, the average laid-off worker will see around 75% of the wages replaced since they worked.

Experts recommend that you work out a budget for your new income. You may need to reduce your expenses to ensure that you can continue to pay your bills.

If you have money left over after the basics are covered, direct it to a savings account, said Kimberly Palmer, a personal finance expert at NerdWallet.

“Many Americans have run out of emergency funds during the pandemic and can now start thinking about supplementing them,” Palmer said.

You will be grateful that you did this if you are still unemployed when the benefits end or if an unexpected expense occurs.

To get the best return on cash, keep your money in a high-yield savings account. Also, make sure that your account is insured by the FDIC, which means that up to $ 250,000 in your deposit is protected from loss.

Once you have a savings pillow, use the extra money (if any) to pay off any high-interest credit card debt, said Kristen Holt, president and CEO of Greenpath Financial Wellness. You don’t want to lose money on interest payments when your budget is already limited.

However, no matter how daunting your credit card debt may be, make sure it doesn’t run out of savings.

“I would not recommend using the cash resources you need to cover drugs and food and to opt for a credit card payment, especially when many lenders continue to provide pandemic assistance,” Holt said. “Contact your bank [or] credit union to determine what further assistance is available and to ensure that the terms are appropriate. “

Experts also say it’s risky to rely on your emergency credit cards, as banks can lower your limit at any time.

Full payments of $ 1,400 will go to those with adjusted gross incomes of up to $ 75,000 for individuals, $ 112,500 for heads of household and $ 150,000 for married couples who file together.

As with previous incentive checks, payments are reduced for those with incomes above these thresholds and are eliminated entirely for people earning $ 80,000 in income, heads of household with $ 120,000 and married couples with $ 160,000.

“Stimulus funds are a unique infusion of cash,” Holt said.

As such, it recommends directing this money immediately to any essential needs that have been put on its back, including medicines, food or car repairs. Some people may see payments this weekend.

Many areas already had rental assistance funds, and through one of them you will apply for new assistance. In other cases, new programs will be created to settle the money.

Tenants should contact local housing groups or their representatives or form local lines 211/311 to identify programs and learn how to apply, said Emily Benfer, a visiting law professor at Wake Forest University.

The National Coalition of Low-Income Housing also has a database of rental assistance programs.

In the latest stimulus package is also a $ 10 billion pot of money for homeowners who were left behind with their mortgages during the pandemic.

Some of the things you can use your money for: your mortgage, utilities, homeowners insurance or homeowners association fees.

“The legislation also includes a provision whereby the Treasury Department can determine other acceptable uses,” said Bob Broeksmit, president and CEO of the Mortgage Banking Association.

The Treasury Department is obliged to distribute funds to state governments within 45 days. “Each state will then set its own process for borrowing and distributing funds,” Broeksmit said.

As with rental assistance, you need to contact your local housing groups or representatives or dial 211/311 to identify programs and find out how to apply for money.

Benefits from SNAP or the Supplemental Nutrition Assistance Program can help you with your food bills and allow you to use other incentives for other pressing expenses.

Benefits were increased by 15% for all beneficiaries by 30 September.

Under the new rules, a person could earn up to $ 234 a month. A family of four could receive up to $ 782 by September. In some states, the maximum benefit is even higher. For example, a family of four in Hawaii can receive a monthly benefit of $ 1,440.

The money will be sent to you every month on an EBT card, which acts as a debit card. People usually get the money in less than 30 days, but those with little or no income can get the benefits within a week.

Eligibility rules may be unclear, but it’s not bad to apply them.

Many people lose the benefit because they mistakenly assume they are ineligible or worry about stigma, said Carrie R. Welton, policy director of advocacy group The Hope Center for College, Community and Justice, last year.

“People will bring their own shame in this regard, but these are resources for taxpayers,” Welton said. “This pandemic is not anyone’s fault.”

Have you recently requested rental assistance? If you are willing to discuss your experience for a story, please email me at [email protected]