A stimulus package of $ 1.9 trillion has just passed. How to use the aid money

Many people’s budgets look very 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 hosting assistance and eviction protection were also needed to keep families afloat.

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

Here’s the tool to expect soon and how experts recommend that you best use it.

Unemployment benefits are extended through September 6, with a $ 300 federal boost on top of any state benefits. The average weekly state check is about $ 324.

Between the benefits and the boost, the average laid-off employee will see about 75% of his pay replaced from the time he started work.

Experts recommend that you create a budget with your new income amount. You may need to cut costs to keep paying your bills.

If you have any cash left over once your basics are covered, use a savings account, said Kimberly Palmer, personal finance expert at NerdWallet.

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

You will be grateful that you did this if you are still unemployed when benefits end or there are unexpected costs.

Keep your money in a high-yield savings account to get the best return on your money. Also, make sure the account is FDIC insured, meaning up to $ 250,000 of your deposit is protected from loss.

Once you have a savings pillow, use extra cash (if there is one) to pay off 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.

But as daunting as credit card debt can be, make sure you’re not left without savings when you pay it off.

“We wouldn’t recommend using the cash you need to pay for drugs and groceries and choosing to pay for a credit card, especially when many lenders continue to provide pandemic relief,” said Holt. “Contact your bank [or] credit union to determine what assistance is still available and ensure that the terms are appropriate. “

Experts also say relying on your credit cards for emergencies is risky, as banks can lower your limit at any time.

Full payments of $ 1,400 go to those with adjusted gross earnings of up to $ 75,000 for individuals, $ 112,500 for heads of household, and $ 150,000 for married couples filing jointly.

As with previous incentive checks, payments are reduced for those with incomes above those thresholds and are phased out completely for those earning $ 80,000 in income, heads of households at $ 120,000, and married couples at $ 160,000.

“Incentive funds are a one-time injection of money,” said Holt.

That’s why she recommends spending this money immediately on any essential needs that have been put on the back burner, including medications, groceries, or a car repair. Some people may already be seeing the payments this weekend.

Many areas already had existing housing benefit funds, and it is through one of these funds that you apply for the new aid. In other cases, new programs will be created to pay out the money.

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

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

The most recent stimulus package also included a $ 10 billion pot for homeowners who fell 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 costs.

“The legislation also includes a provision that allows the Treasury Department to determine other acceptable uses,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association.

The Treasury Department is required to distribute money to state governments within 45 days. “Each state will then determine its process for borrower applications and the distribution of funds,” said Broeksmit.

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

Benefits under SNAP, or the Supplemental Nutritional Assistance Program, can help with your grocery bills and enable you to use other incentive tools for other urgent expenses.

Benefits are increased by 15% for all recipients through September 30.

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

The money is 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 to no income can get their benefits within a week.

Eligibility rules can be shaky, but it doesn’t hurt to apply.

Many people miss out on benefits because they mistakenly assume they are ineligible or are concerned about the stigma, Carrie R. Welton, the policy director at advocacy group The Hope Center for College, Community and Justice, told CNBC last year.

“People will bring their own shame into this, but these are taxpayer resources,” Welton said. “This pandemic is not anyone’s fault.”

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