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Many people’s budgets look very different during Covid.
Unemployment benefits and direct payments have replaced paychecks on the income ledger.
For many, that aid is still not enough, and food and rental assistance, as well as protections against eviction, have also been necessary to keep families afloat.
Fortunately, more of that relief is on the way now. President Joe Biden signed into law a $ 1.9 trillion stimulus package on Thursday.
Here’s the help you can expect to see soon, and how the experts recommend that you best use it.
1. Unemployment benefits
Unemployment benefits will run through September 6, with a federal increase of $ 300 in addition to state benefits. The average weekly state check is around $ 324.
Between the state benefit and the boost, the average laid off worker will see about 75% of their salary replaced since they were working.
Experts recommend that you budget for your new income amount. You may need to cut back on expenses to make sure you can keep paying your bills.
If you have some cash left after you cover your basics, direct it into a savings account, said Kimberly Palmer, a personal finance expert at NerdWallet.
“Many Americans exhausted their emergency funds during the pandemic and can now begin to think about replenishing them,” Palmer said.
You will be thankful you did if you are still unemployed when benefits end or an unexpected expense arises.
To get the best return on your cash, keep your money in a high-yield savings account. Also make sure the account is FDIC insured, which means up to $ 250,000 of your deposit is protected against loss.
Once you have a savings cushion, use 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 tight.
However daunting credit card debt can be, make sure paying it off doesn’t leave you without savings.
“We would not recommend using the cash resources you need to cover drugs and groceries and opting to pay by credit card, particularly when many lenders continue to provide pandemic assistance,” Holt said. “Contact your bank [or] credit union to determine what assistance is still available and make sure the terms are appropriate. “
Experts also say that relying on your credit cards for emergencies is risky because banks can lower your limit at any time.
2. Stimulus controls
The full payments of $ 1,400 will go to those with adjusted gross income of up to $ 75,000 for individuals, $ 112,500 for heads of household, and $ 150,000 for married couples filing jointly.
As with previous stimulus checks, payments are reduced for those with incomes above those thresholds and eliminated entirely for individuals earning $ 80,000 in income, heads of household with $ 120,000, and married couples with $ 160,000.
“The stimulus funds are a one-time cash injection,” Holt said.
As such, he recommends immediately directing this cash to any essential needs that have been left in the background, including medicine, groceries, or car repair. Some people can see the payments as early as this weekend.
3. Rental assistance
Many areas already had existing rental assistance funds, and it will be through one of them that you will apply for the new assistance. In other cases, new programs will be created to disburse the money.
Renters should contact local housing groups or their representatives or dial their local 211/311 lines to identify programs and learn how to apply, said Emily Benfer, a visiting law professor at Wake Forest University.
The National Low Income Housing Coalition also has a database of rental assistance programs.
4. Mortgage assistance
Also included in the most recent stimulus package is a $ 10 billion money pot for homeowners who have fallen behind on their mortgages during the pandemic.
Some of the things you can use the money for: your mortgage, utilities, homeowners insurance, or homeowners association fees.
“The legislation also includes a provision by which the Treasury Department can determine other acceptable uses,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association.
The Treasury Department must distribute funds to state governments within 45 days. “Each state will then determine its process for borrowing applications and funding distribution,” Broeksmit said.
As with rental assistance, you should contact local housing groups or their representatives or dial local 211/311 lines to identify programs and learn how to apply for the money.
5. Food benefits
SNAP benefits, or the Supplemental Nutrition Assistance Program, can help you with your grocery bills and allow you to use other stimulus assistance for other urgent expenses.
Benefits have been increased by 15% for all beneficiaries until September 30.
Under the new rules, a person could receive up to $ 234 a month. A family of four could receive up to $ 782 through 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 like a debit card. Generally, people get the money in less than 30 days, but those with little or no income can get their benefits in a week.
The eligibility rules can be imprecise, but it doesn’t hurt to apply them.
Many people miss out on the benefit because they mistakenly assume they are not eligible or worry about stigma, Carrie R. Welton, policy director for advocacy group The Hope Center for College, Community and Justice, told CNBC last year.
“People will bring their own shame to this, but these are taxpayer resources,” Welton said. “This pandemic is nobody’s fault.”
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