The next round of stimulus checks is on the horizon, providing much-needed relief for millions of Americans.
On Wednesday morning, a bipartisan group of congressional leaders agreed on $900 billion COVID-19 relief. It includes the next round of stimulus payments to millions of people.
In response to the pandemic, the government issued a lockdown as a public health measure. Unfortunately, it caused massive unemployment for most hard-working citizens.
The government released stimulus checks in March, but they haven’t followed up with another round. Hopefully, the new COVID-19 relief will provide stimulus money for those who need it.
If you’re also waiting for the upcoming relief, here’s the latest stimulus check updates. More importantly, we offer tips on how you can spend your stimulus wisely.
First Stimulus Checks From CARES Act
The federal government launched the CARES Act in March to help citizens during the coronavirus pandemic.
This included economic impact payments in the form of paper checks for individuals. Alternatively, people could provide their deposit details to the IRS to receive it on their bank accounts.
Single taxpayers received $1,200 payments while couples filing jointly got $2,400. Children under the age of 17 also received $500. However, certain criteria determine whether or not people will receive the full amount.
According to the Internal Revenue Service (IRS), 160 million people have received their share of stimulus checks. Sadly, there are around 9 million others who have yet to receive their economic impact payments.
After the initial round of payments, no funds followed up for several months. Hopefully, the new COVID-19 relief fund will provide additional funds for individuals.
Second Round Of Stimulus?
According to Sen. John Thune, R-S.D., the upcoming stimulus checks may provide around $600 to $700 for each individual. This will cost $150 to $300 million in total.
Back then, the House of Representatives and the Senate could not finalize an agreement. Both sides have proposed their versions, but they’ve turned down each other’s plans.
Fortunately, government leaders are optimistic about finalizing an agreement. President-elect Joe Biden even commended the upcoming relief package as “encouraging.” He added that it could be an important down payment that may lead to more lavish spending for 2021.
What To Do With Second US Stimulus Checks
You may anticipate the next round of relief checks by following certain tips. Planning for the upcoming relief will help you allocate the funds efficiently.
First, check if there’s an amount you haven’t claimed yet. If you have pending funds, you could file a 2020 Form 1040 to receive a Recovery Rebate Credit.
It’s the amount you haven’t received based on your 2020 tax returns filed in 2021. Alternatively, you don’t need to accomplish the form under certain conditions. Please check the Internal Revenue Service website (IRS) for more information.
Second, list your debts and see how you could repay them using around $600-$700. Credit card debts and similar balances grow over time due to interest. Completely paying them off will allow you to focus your finances on other things.
You could follow a budgeting method like the 50-30-20 method, so you could properly spend the upcoming stimulus check. These provide a structure that could facilitate your budgeting strategy.
Third, you could use the stimulus checks to start building your emergency fund. It typically covers 3-6 months’ worth of expenses. Due to the pandemic, you may want to save for at least a year. Additional funds could help you get through further economic hardship.
Lastly, you could use the second stimulus check as an investment. You may allocate the funds to a Roth IRA retirement account. Eventually, that amount could help you retire much easier.
If you’re ambitious, you may invest in the stock market. They might just rise in value, so you could eventually sell them at a higher price. Build your portfolio wisely, and you might just earn despite the pandemic!
Alternatively, you could put the stimulus in high-yield savings accounts. Your money could increase by 20-25 times higher compared to regular savings accounts. Even better, these could connect to your checking accounts, so you can conveniently withdraw money.
More importantly, keep yourself updated with the latest financial tips during the coronavirus.
Learn about the recent developments regarding the pandemic and plan accordingly. You could find handy financial tips when the coronavirus programs end.
Wise Spending With Or Without Stimulus Checks
Regardless of these relief cash payments, you should manage your finances wisely.
Write down a budget plan, so you can efficiently allocate your funds. Now more than ever, you should refrain from impulse purchases. Use your money only when necessary.
Set aside a huge sum for potential emergencies. With all the excessive uncertainty, it pays to have funds for urgent needs.
Bernie Sanders believes the $600 stimulus check is great news for struggling families. However, he admits that people need much greater aid.
You don’t have to wait for the relief funds to fix your finances. Wise spending habits can help you manage your finances wisely, regardless of a stimulus check.