After many months of bickering, Washington is at long last sending new direct payments to Americans, to help households and the economy deal with the financial fallout from COVID-19.
Yes, we’re talking about a second round of “stimulus checks.”
They’re included in a $900 billion coronavirus rescue package that Congress passed last week and President Donald Trump signed into law Sunday evening. A White House official has said the payments could go out surprisingly soon.
“More help is on the way,” Senate Majority Leader Mitch McConnell (pictured) said days before Christmas as he announced that the compromise bill had been reached.
Trump complains that the checks are “measly,” and he wants lawmakers to boost them. You may find the amount disappointing — and will want a plan to find other relief on your own.
Counting on another $1,200? Sorry
The new aid bill includes money for struggling businesses, $300 a week in bonus unemployment benefits, and fresh direct payments to help struggling U.S. households and stimulate the weak economy.
How much will most people get? $600 — half the $1,200 per person the IRS distributed the first time, about eight months ago.
Americans have been eager for more government cash, especially as the out-of-control pandemic prompts new lockdowns and layoffs. Nearly 6 in 10 (57%) say they’re in a financial squeeze from the coronavirus, according to a recent survey from credit bureau TransUnion.
But Trump called the relief package a “disgrace,” and he has urged Congress to increase the payment amount to $2,000 per person. On Monday, the U.S. House approved a measure to do that, but the proposal got blocked in the Senate (by Majority Leader McConnell) on Tuesday.
President-elect Joe Biden said last week that Americans should think of the checks as merely a “down payment.” He promises to push for more money once he’s in office next month.
What if you need more than $600 right now?
If you’re straining to make ends meet and need more than a $600 payment right now, consider these ways to pull together more money on your own:
-
Slash your spending. Dump any subscription services you’re not using. Do more of your own cooking and stop ordering carryout so much. And download a free browser add-on that will save you money every time you shop online, by instantly checking for better prices.
-
Cut your debt down to size. If you’ve been leaning on your credit cards during the coronavirus crisis, you’re probably piling on a lot of interest. Tame your credit card debt — and make it go away more quickly — by rolling your balances into a single debt consolidation loan at lower interest.
-
Trim your insurance costs. As Americans have cut back on their driving this year, many car insurance companies have lowered their rates. If your insurer won’t cut you a break, it’s time to shop around for a better option. You also might save hundreds by comparing rates to get a better deal on your home insurance.
-
Refinance your mortgage. Mortgage rates are at record lows, and refinancing your existing loan could provide huge savings. Mortgage tech and data provider Black Knight says 19.4 million U.S. homeowners could cut their monthly house payments by an average $308 per month through a refi.
When can you expect your check?
A survey from the U.S. Bureau of Labor Statistics found that close to 60% of Americans used their first stimulus checks to cover basic expenses including groceries and utility bills.
Some also invested the money, according to the survey, or used it for other, unspecified purposes. Those may have included buying affordable life insurance— sales of life insurance policies have surged this year in the shadow of the pandemic.
Treasury Secretary Steve Mnuchin had said the new cash from the government could start flowing before New Year’s.
“The good news is this is a very, very fast way of getting money into the economy,” Mnuchin told CNBC last week. He said people might start to receive their payments a few days after Christmas — but the president’s delay will now add a few days.
The first recipients will be taxpayers who can quickly receive direct payments into their bank accounts, because the IRS already has their banking information. That group includes those who received their last stimulus payment by direct deposit.
