How to spend incoming relief

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

The $ 1.9 trillion stimulus package being drafted in Congress and expected to be enacted by mid-March will likely include up to $ 1,400 out-of-pocket payments, an extension of unemployment checks, more than 20 billion dollars in housing assistance and improved food benefits. .

The relief program comes about a year after the start of a pandemic that squeezed the finances of many people, costing them their jobs, forcing them into debt, delay paying bills and worrying about not have an eviction notice.

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Here’s a look at what help those who suffer financially will soon see, and how they might consider spending it. (Keep in mind that the exact details of these programs are still being negotiated by lawmakers and could change.)

From now on, full direct stimulus payments of $ 1,400 would go to people with adjusted gross income up to $ 75,000, heads of households with up to $ 112,500, and married couples who jointly deposit with a maximum. of $ 150,000.

Under new terms set by the Senate and accepted by President Joe Biden, payments would decrease as you earn above these thresholds, phasing out people earning $ 80,000, heads of households with $ 120,000, and married couples. with 160,000 USD.

“Stimulus funds are a one-time injection of cash,” said Kristen Holt, President and CEO of Greenpath Financial Wellness.

Holt recommends directing this money immediately to any basic needs that have been put on hold, including medicine, groceries or an auto repair.

It looks like unemployment benefits will be extended until September 6, with a federal increase of $ 300 on top of state benefits. The average weekly health check is $ 346.

Your unemployment checks may or may not be equal to what you earned before you lost your job. Experts recommend that you budget with your new amount of income. You may need to cut back on spending to make sure you can keep paying your bills.

If you have any money left over after your basics are covered, direct it to a savings account, Holt said.

You will be thankful you did if you are still unemployed when benefits end or if an unforeseen expense arises. (To get the best return on your money, keep your money in a high yield savings account. Also make sure the account is FDIC insured, which means that up to $ 250,000 of your deposit is protected from loss.)

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

But as daunting as credit card debt can be, you don’t want to use all of your money to knock it out.

“We would not recommend using the cash resources you need to cover drugs and groceries and choose to pay off a credit card, especially when many lenders continue to provide pandemic assistance,” he said. Holt said. “Contact your bank [or] credit union to determine what help is still available and ensure the terms are appropriate. “

About 1 in 5 renters said they were not caught up on their rent in January, according to an analysis by the Center on Budget Policies and Priorities. Almost 36% of black renters said they were late.

An increasing amount of federal money that people can spend on their rent arrears will help.

All states have already received $ 25 billion in housing assistance as part of the stimulus package adopted in December. Now that $ 1.9 trillion relief bill in the works would set aside an additional $ 20 billion.

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

The benefits of SNAP, or the Supplemental Nutritional Assistance Program, can help you with your grocery bills and allow you to use other stimulus aids for other urgent expenses.

Benefits have been increased by 15% for all beneficiaries until June, and the latest stimulus package is expected to extend the boost until September.

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

The money will be sent to you each month on an EBT card, which acts like a debit card. People usually get their money in less than 30 days, but those with little or no income could get their benefits in a week.

The eligibility rules can be wobbly, but it doesn’t hurt to apply.

A lot of people don’t take advantage of this benefit because they mistakenly assume they aren’t eligible or worry about stigma, Carrie R. Welton, policy director for the advocacy group, told CNBC The Hope Center for College, Community and Justice, last year.

“People will bring their own shame to this, but these are taxpayer resources,” Welton said. “This pandemic is no one’s fault.”

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