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Americans got new stimulus checks. Pay attention to key points (according to CNBC)

  • New $ 1,400 stimulus checks are aimed at helping Americans pay off existing debts, buy basic necessities and pay bills.
  • One year after the start of the Pandemic, there has been a change in attitudes towards money.
  • People expect the funds received to last for less than 3 months.

Americans are using a new $ 1,400 stimulus checks to pay their monthly bills, according to new research. Moreover, this happens regardless of the income they receive. Payments of up to $ 1,400 per person (plus $ 1,400 per dependent) were approved by Congress in March based on the American Rescue Plan Act. Thus, to date, the government has sent more than 156 million payments. The total amount of payments amounted to $ 372 billion.

Online short-term Loans research service COMPACOM finance experts revealed how Americans are going to spend the last check as a percentage (note that respondents may have chosen more than one use):

  • 45% of Americans are going to use the last round of checks to pay monthly expenses
  • 36% want to use the money to cover their daily needs
  • 28% of people are going to increase their savings.

An interesting fact is that only 13% of people said they use their $ 1,400 stimulus checks on minor items or discretionary actions.

 

March 2020, %

January 2021, %

April 2021, %

Monthly bills

50

43

45

Day-to-day essentials

42

33

37

Paying down debt

25

25

33

Adding to savings

30

30

27

Nonessential spending

8

8

13

Investments

7

6

11

Charity

0

0

7

Something else

8

10

6

Don't know

6

5

6


So below you can see how Americans are handling their Stimulus Checks according to a March 2021 survey.

Can stimulus checks be garnished for existing debts?

Despite the fact that many people are interested in this question, it is difficult to give a definite answer. Thus, on the one hand - yes, on the other - no. Let's look at it in order.

So, new stimulus checks cannot be used to pay taxes, student loans or alimony, however, unlike the last $ 600 check, this latest round can still be used by debt collectors to pay for past-due credit card debt. However, a court order must be brought against you in order for the collectors to take your money. Banks may take parts from your money in order to pay fees, but private collectors are more decisive and aggressive.

However, the government is struggling with check garnishment, which is why New Jersey Governor Phil Murphy recently announced good news for state residents. It lies in the fact that now 49 banks and credit institutions are protecting the payments of Americans from being garnished, since, according to Murphy, "The American Rescue Plan is for the American people - not the banks and creditors."

Waiting for the next stimulus checks? Prioritize!

Surely you understand that the coronavirus pandemic has negatively affected the global economy and the lives of Americans. Unfortunately, more than 30 million people are unemployed, so they turn to the federal government to get help. People need money to pay rent, utility bills, shopping and food and other vital needs.

Even though the latest relief proposal from Senate Republicans includes another round of Stimulus checks, it will still take some time before people can actually get them. The HEALS Act aims to pay $ 1,200 to people earning up to $ 75,000 and $ 2,400 to couples who make up to $ 150,000 together. An additional $ 500 per dependent will also be paid. Those people who earn more than the above amounts will receive less payout. Moreover, payments to individuals who earn $ 99,000 and to couples with an income of $ 198,000 will gradually stop.

Also, President Donald Trump signed several decrees according to which payroll taxes and student loans will be postponed until the end of the year. Moreover, some measures were envisaged to protect people from eviction as well as to expand federal unemployment benefits. However, according to the latest consumer survey by TansUnion, about 77% of people affected by the pandemic are worried about being able to pay bills and pay off their existing loans. On average, aloof say their deficit is just over $ 870 this month.

How to decide which bills are priority?

If you don't have enough money, it can be very difficult to decide how to prioritize and manage it. Pay attention to the points below that will help you decide which bills should be covered first if you do not currently have enough money to cover all your existing expenses.

1. Examine your spending in order to survive

The very first step you need to take if you do not have enough money to deal with debt is to first determine what you are spending your money on. Since many Americans are expecting the second round of the $ 1400 Stimulus Check, they don't pay much attention to how much or where they are spending. However, it is important to understand that a new round of checks is not yet guaranteed, moreover, in any case, it will not be able to cover all your existing expenses and debts, even if you receive one.

Therefore, the first thing you need to do is identify and write down your basic monthly needs. These include the following:

  • Shelter
  • Utility bills
  • Food
  • Transportation
  • Medicine

Thus, instead of madly spending money and waiting for the next payment, you should know your income and expenses and be able to highlight the main thing. So how much money do you need per month to survive?

So, in order to decide which bills are worth paying immediately and which ones can wait, ask yourself a few questions: Will I be in danger if I don't pay? Will I be unhealthy if I don't pay? If you answer yes to one or both of these questions, it means that the account data is a priority for you and you should cover it as soon as possible. So, first of all, housing and food should always be your priority, since these are exactly the things without which you cannot survive.

2. Explore what help you can get

Once you have identified which bills are prioritized, you will need to identify the next most important costs. Second most important are those payments that are still needed but not vital. These include, for example, cell phone service, internet and utilities. Note also that many utilities may provide an extra month to pay bills before they are shut down.

You should also investigate whether it is possible to suspend or reduce existing payments using assistance and payment deferment programs offered by different cell phone providers, utility companies, credit card issuers and so on. Most likely, you already tried to contact them at the beginning of the pandemic. However, if you did not succeed, then it makes sense to turn to suppliers again, especially if unemployment has affected your financial situation and the ability to pay payments.

Please note that this point is very important for your budget. Remember that there is no sense in spending Stimulus Check money to pay off your mortgage if, for example, you have a federally-backed loan that will help you defer payment on for six month or a year (without racking up fees or interest!). However, please note that you cannot stop making payments without talking to the lender, as this can lead to additional problems.

3. Pay attention to debts that require immediate payment.

If you have coped with the basic expenses for a month and you still have money left in the budget, you should pay attention to other debts that must be paid off as soon as possible. One of the best ways to prioritize debt is by asking what can they take if I don't pay it back?

Pay attention to your property. If you have, for example, a house or a car, then these assets can be taken away if you do not make payments on the mortgage or loan. However, please note that if you cannot pay off your medical bill or student loan, for example, you will not lose your health or education. Thus, focus on debt that can really deprive you of something. Thus, pay first for what can be picked up, such as accommodation or transport.

Important! These priorities outlined in this clause should only be a temporary solution to your problems, as medical bills and student loans must also be paid off. If you keep missing out on government loan payments, you could have your tax refund garnished by the government. The government doesn't even have to go to court to do this. Also be aware of other creditors who may sue you if you do not make payments.

4. Do not impulsively repay all debts

Even after the main expenses you still have money left, you still need not rush to pay off all existing debts (such as student loans or credit cards) right now. Experts recommend paying a little more than the minimum required payment in order to pay off debt faster and avoid additional interest.

However, in the current situation, the more logical solution would be to have cash in order to be able to pay and buy all the essentials (instead of thinking about long-term debt). Moreover, note that the CARES Act, passed by Congress in March, allowed federal student loan borrowers to temporarily suspend payments until the end of September and also cut interest rates. federal loan rates up to 0%. While this may seem like strange and illogical advice, you shouldn't think about long-term debt in a difficult life situation. In the end, you don't know what might happen tomorrow or in a couple of days. You may need money again that you will no longer have.

5. Get help

In times of financial difficulty, many people think the situation is hopeless, but this is not true. It is important to seek help and do it as quickly as possible. First of all, reach out to your family and friends, talk about your situation, and also look out for websites like AuntBertha.com and HHS.gov that offer programs and services that can help you with food, shelter and transportation.

Do not feel ashamed if you find yourself in a difficult financial situation and need help. Remember that some bills such as child care can be more flexible as you can ask a loved one to look after your child or go to a community center for a small fee. Look for an opportunity to get help and you will be able to cope with any difficulties.