Unemployment benefits. Stimulus checks. How to best spend the aid that’s on the way – CNBC
- March 15, 2021
- By: Greenpath Financial Wellness
Excerpt from CNBC discusses the third round of Covid stimulus aid, what to expect, and how to best utilize it, with insight from GreenPath CEO, Kristen Holt.
Many people’s budgets look a lot different during Covid.
Unemployment benefits and direct payments have replaced paychecks in 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 now on the way. President Joe Biden signed into law a $1.9 trillion stimulus package on Thursday.
Here’s the aid you can expect to soon see and how experts recommend that you best put it to use.
Jobless benefits will be extended until Sept. 6, with a $300 federal boost on top of any state benefits. Experts recommend updating your budget and ensuring that basics are covered first, with additional income directed towards savings.
Once you have a savings cushion, use additional money (if there is any) to pay down any high-interest credit card debt, said Kristen Holt, president and CEO of Greenpath Financial Wellness. You don’t want to be losing your money to interest payments when your budget is already tight.
Yet as daunting as credit card debt can be, make sure paying it off doesn’t leave you without any savings.
“We would not recommend using cash resources that you need to cover medicine and groceries and opt to pay a 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 suitable.”
Full $1,400 payments 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.
“Stimulus funds are a one-time cash infusion,” Holt said.
As such, she recommends immediately directing this cash to any essential needs that have been put on the back burner, including medications, groceries or a car repair.
There’s now more than $45 billion in rental assistance available and you want to apply for these funds as soon as possible.
That way you can use other aid, such as stimulus checks and unemployment benefits, for other bills. People can get financial assistance for up to 18 months of rent.
Included in the most recent stimulus package is also a $10 billion pot of money for homeowners who have fallen behind on their mortgages during the pandemic. The funds can be used on mortgages, utilities, homeowner’s insurance and homeowner’s association fees.
Benefits under SNAP, or the Supplemental Nutrition Assistance Program, can help you with your grocery bills and allow you to use other stimulus aid for other pressing expenses. The benefits have been increased by 15% for all recipients until Sept. 30.
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