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Incentive Check: 6 Ways to Use Your $ 600 Payment



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7;s new stimulus check?

Sarah Tew / CNET

Do you have your second stimulus control? The direct payment for up to $ 600 per person and even more for households, has has already found its way to the bank accounts and mailboxes of millions of Americans last week, with more on the way this week (here is how to track your check). The payments come after President Donald Trump signed a $ 2.3 trillion omnibus bill on Dec. 27, including $ 900 million for COVID-19 aid.

The stimulus controls arrive nine months after the passage of the CARES Act last March, including a check for $ 1,200. After a five-day delay by Trump in signing the omnibus expense account and calling for larger payments of $ 2,000the House of Representatives has one standalone account to increase the $ 600 up to that amount. However, the legislation has not passed the Senate. President-elect Biden says he wants to see bigger checks and his incentive plan calls for even more payments to Americans.

The second stimulus controls started hitting bank accounts on Dec. 31 and will continue processing this week. The agency has up to January 15 to send checks to people who qualify for another payment (here is who is not eligible). Whether you’ve received your stimulus check or are still waiting, here are six ways to get the most out of your money.

Take care of your immediate needs

Above all, make sure your immediate needs are met. This includes food, monthly bills and rent or mortgage. But before you prioritize rent over food, for example, consider that many jurisdictions, utilities, and even banks are providing relief from the pandemic. Find out which programs you can take advantage of and then allocate resources. For example, an federal deportation ban until January 31 is expected to be renewed under President elect Joe Biden.

Save to pay your taxes

It’s January 2021 and it is unlikely IRS will delay tax returns like last year. This means that tax is due in four months. Stimulus controls are not taxed according to the IRS, but unemployment benefits will be taxed. If you don’t need to use the $ 600 right away, keeping it nearby to pay your taxes is ideal.


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Pay off your debt

One way to secure your financial future is to reduce your debt. A significant payment made to pay off a credit card and loan helps reduce the amount of interest paid on an account with a balance. The less interest you pay, the more money you will have available in the future. But before you do that, check with the debt holders as some offer relief, including deferred payments and forgiven interest. Just be sure to read the fine print, as some of the help provided can slow interest rather than forgive.

Start or add to an existing emergency fund

It cannot be overstated the importance of having an emergency fund. As this pandemic shows, the world can change very quickly. The fund should be equal to the amount spent on expenses over three to six months. While the The $ 600 stimulus check will not cover that entire amount, it can be used as a starting point. If you’ve exhausted or spent some of your emergency funds, this second stimulus check can help get you back on track. A simple savings account can be used to keep the money safe.

Give to those in need

Those lucky enough not to need any of the $ 600 for themselves should consider giving it to those who do. There are still many charities fighting the pandemic, such as food banks and hospitals. Another consideration is to help friends and family members who have been hit hard by the pandemic.

Open a long-term investment account for your children

Part of the aid package provides an additional $ 600 per child. If your family is already comfortable, there is a way to use that money to help your kids’ future.

“If you don’t need this money, consider opening a 529 plan for your child,” said Marguerita Cheng, a certified financial planner. “Your state can provide a tax break. This money can become tax-free. You can even contribute a modest amount of say $ 50 to $ 100 on a regular basis if necessary.”

To start a 529 plan, contact your bank or investment firm to see what they have available and what benefits you get when you open one.


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