A $ 1.9 trillion stimulus package has just been approved. How to use aid money

Many people’s budgets look very different during Covid.

Unemployment benefits and direct payments replaced paychecks in the revenue ledger.

For many, this aid is still not enough, and food and assistance for rent, as well as eviction protections, were also needed to keep families afloat.

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

Here is the help you can expect to see soon and how experts recommend that you put it to good use.

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

Between the state benefit and the increase, the average dismissed worker will see about 75% of their wages replaced when they were working.

Experts recommend that you work out a budget with the new revenue amount. It may be necessary to cut expenses to ensure that you can continue to pay your bills.

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

“Many Americans exhausted their emergency funds during the pandemic and now they can start thinking about replenishing them,” said Palmer.

You will be grateful to have done this if you are still unemployed when benefits end or if an unexpected expense arises.

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

Once you have a savings reserve, use additional cash (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 your money on interest payments when your budget is already tight.

However, as frightening as credit card debt is, make sure that paying it does not leave you with no savings.

“We do not recommend using the cash resources you need to cover medicines and groceries and choose to pay by credit card, especially when many creditors continue to provide assistance with the pandemic,” said Holt. “Contact your bank [or] credit union to determine what assistance is still available and make sure the terms are appropriate. “

Experts also say it is risky to rely on your credit cards for emergencies because banks can lower your limit at any time.

Total payments of $ 1,400 will go to those with an adjusted gross income of up to $ 75,000 for individuals, $ 112,500 for heads of households and $ 150,000 for couples filing joint actions.

As with previous stimulus checks, payments are reduced for those with an income above those limits and totally eliminated for individuals with an income of $ 80,000, heads of household with $ 120,000 and married couples with $ 160,000.

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

As such, she recommends directing that money immediately to any essential needs that have been put on a back burner, including medicines, groceries or car repairs. Some people can see payments as early as this weekend.

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

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

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

Included in the latest stimulus package is also a $ 10 billion cash pot for homeowners who fell behind on their mortgages during the pandemic.

Some of the things you can use the money on: Your mortgage, utilities, home insurance or homeowner’s 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 requests and distributing funds,” said Broeksmit.

As with rental assistance, you should contact local housing groups or their representatives or call local 211/311 lines to identify programs and find out how to apply for money.

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

Benefits have been increased by 15% for all recipients by September 30.

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

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

The eligibility rules may be unstable, but it does not cost to apply them.

Many people miss the benefit because they mistakenly assume they are not eligible or worry about stigma, Carrie R. Welton, director of policies for the defense group The Hope Center for College, Community and Justice, told CNBC last year.

“People are going to bring their own shame to this, but those are taxpayer resources,” said Welton. “This pandemic is nobody’s fault.”

Have you recently signed up for rental assistance? If you are willing to discuss your experience for a story, send an email to [email protected]