How to spend the relief received

If you are one of the millions of Americans who are struggling financially because of the coronavirus pandemic, more relief is on the way.

Included in the $ 1.9 trillion stimulus package running through Congress and expected to be signed into law by mid-March, direct payments of up to $ 1,400 will likely be an extension of unemployment checks. , over $ 20 billion in rental assistance and improved food benefits.

The aid package comes in about a year in a pandemic that has affected the finances of many people, costing them jobs, forcing them to take on debts, delaying the payment of bills and worrying that they will not have evacuation notifications available. .

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Here’s a look at some of the benefits that the financially injured will soon see and how they might think about spending. (Please note, the exact details of these programs are still being negotiated by parliamentarians and may change.)

From now on, direct incentive payments of $ 1,400 would be for people with an adjusted gross income of up to $ 75,000, heads of households with up to $ 112,500, and married couples who file with up to $ 150,000.

Under the new terms set by the Senate and approved by President Joe Biden, payments would fall the more you earn above these thresholds, completely eliminating $ 80,000 earners, $ 120,000 heads of household and married couples $ 160,000. dollars.

“Stimulus funds are a unique cash infusion,” said Kristen Holt, president and CEO of Greenpath Financial Wellness.

Holt recommends directing this money immediately to any essential needs that have been put on the backburner, including medications, food, or car repairs.

It looks like unemployment benefits will be extended through Sept. 6, with a $ 300 federal increase in addition to state benefits. The average weekly check is $ 346.

Unemployment checks may or may not be equal to what you earn before you lose your job. Experts recommend making a budget with your new income. You may need to reduce your expenses to ensure that you can continue to pay your bills.

If you still have money left over after the basics are covered, direct it to a savings account, Holt 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 your account is FDIC-insured, which means that up to $ 250,000 in deposit is protected by loss.)

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

But no matter how daunting your credit card debt may be, you don’t want to spend all your money on it.

“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 assistance is still available and to make sure the terms are appropriate. “

About 1 in 5 tenants said they were not caught renting in January, according to an analysis by the Center for Budgetary Policies and Priorities. Nearly 36% of black tenants said they were behind.

An increasing amount of federal money that people can pay for rent arrears will help.

All states have already received $ 25 billion in rental assistance from the incentive package adopted in December. Now, this $ 1.9 trillion exemption bill in the works would set aside another $ 20 billion.

You want to apply for these funds as soon as possible. This way, you can use other benefits, such as incentive checks and unemployment benefits, for other bills. People can receive financial assistance for up to 18 months rent.

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 have been increased by 15% for all beneficiaries by June, and the latest incentive package is expected to extend the momentum by 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 the stigma, said Carrie R. Welton, policy director for 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]