Newsweek - USA (2021-02-19)

BY

KERRI ANNE RENZULLI

@kerenzulli

NEWSWEEK.COM 9

“In its own way, India has set an example.” » P.

Photo illustration by C.J. BURTON

under president joe biden’s proposed

$1.9 trillion coronavirus relief plan, most

Americans would receive a third round of stimu-

lus payments—this time a more generous $1,

per person and perhaps as much as $5,600 for a

family of four and $7,000 for a family of five. Given

the sizeable amounts involved, the challenge, if the

measure passes, will be to make sure you use the

money in a way that delivers the biggest boost to

your family’s financial security.

“The stimulus funds should be viewed as a way

to lessen one’s financial stress, not as a windfall,”

says financial planner Nick Hofer, president of

Boston Family Advisors.

The emergency pandemic relief package, dubbed

the American Rescue Plan, still faces significant hur-

dles on the path to becoming law. Republican law-

makers have countered with a smaller,

$618 billion proposal that would give

$1,000 stimulus checks to far fewer

Americans. But given the Senate’s

current even split between GOP and

Democratic members, with some

procedural maneuvering, a slim ma-

jority might be enough to see Biden’s plan through.

Either way, it could be spring before Americans see

any new stimulus money as the impeachment trial

of former President Donald Trump, along with the

ongoing confirmation hearings for various mem-

bers of the Biden administration, could divert Con-

gressional attention and delay passage.

Still, Biden says he is committed to providing the

additional aid, piling onto the $600 payments sent

out in the last stimulus package to “finish the job

of getting a total of $2,000 in cash relief to people

who need it the most.”

That would represent a huge one-time boon in

income—bigger than either of the previous pack-

ages provided: In addition to the proposed $1,

sum per individual, households would likely re-

ceive payments for each dependent, including for

the first time potentially, adult dependents, such

as those age 17 and older and college students, who

weren’t eligible for funds in the two previous stim-

ulus rounds. And that dependent bonus could be

up to another $1,400, rather than the $500 or $

awarded in the two previous stimulus plans.

While qualifying details remain to be seen, if

the bill follows the parameters of the previous pay-

ments, then individuals earning up to $75,000 and

couples earning up to $150,000 in 2019 will receive

the full amount. The checks diminish in size grad-

ually for households earning more, topping out at

$87,000 for single filers and $174,000 for joint filers,

in the second stimulus round, and $99,000 for in-

dividuals and $198,000 for married couples filing

jointly, in the first stimulus round.

This means about nine in 10 Americans would

likely qualify for some stimulus payment, according

to the Federal Reserve Bank of New York—and the

time to think about how to maximize

the benefit to your family is now.

Hofer, the financial planner, sug-

gests the process starts by zeroing in

on the biggest stress points in your

budget: “The first question to ask is,

what is causing me the most anxiety?

What is keeping me up at night?”

For many people, the answer, after such a finan-

cially rocky year, is likely not one thing, but several,

from not having enough money tucked away for

emergencies to past-due bills to high-interest credit

card debt. Newsweek spoke with financial experts

about how to prioritize competing money needs

and ensure that your stimulus check does the most

good for your particular circumstances.

Take Care of Basics First

if cash is tight in your home and you’re

struggling to pay the bills for your basic living

expenses, there is no debate over where this stim-

ulus check should go. Keeping the pantry stocked

and a roof over your head always take top priority,

so if you need to use this money to catch up on

household bills for rent, utilities or food, know that

• you will be in good company.
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