Starting his presidency with a renewed commitment to fight the economic fallout of COVID, one of the first items on President Joe Biden’s agenda is pushing to approve his $1.9 trillion coronavirus stimulus package, expected to provide $1,400 checks as direct payments that will financially relieve millions in America.
Known as the American Rescue Plan, the initiative, though generous, is expected to combat harsh opposition from fiscally conservative lawmakers before it can be released, raising concerns that this proposal could become the victim of deep political divisions within America’s centers of power. For this reason, it may be months until this new stimulus package will be approved.
The Plan Proposes:
- $1,400 stimulus checks in direct payments to the majority of Americans (this will complete the promise for a $2000 stimulus check since the IRS distributed $600 direct payments last December.)
- 43 million food stamp beneficiaries will enjoy increased food aid until the end of 2021.
- Raising the minimum wages across the country to $15 an hour for hourly workers.
- Educational organizations and institutes will receive $170 billion.
- Federal unemployment benefits will increase to $400 per week till the end of this coming September.
- $50 billion will be committed to coronavirus testing.
- Child Tax Credit will increase to $3,000 per child and $3,600 for children under 6 years old (Fully refundable till the end of 2021.)
- The National Vaccine Program will receive $20 billion.
- Postponing all evictions and foreclosure moratoriums until the end of next September.
How You Should Be Preparing Yourself
Many things are going to change and it’s up to everyone to be prepared. The new American Rescue Plan, in comparison to the previous stimulus package, promises to be more inclusive by giving the $1,400 direct payments to two major social segments that were left out of receiving previous stimulus payments, adult dependents and mixed-status families. (Note: With this new proposal in place, mixed-status households would be defined as those living together in one residence, where at least one individual is a noncitizen. This can include couples who are legally married, where one partner is a citizen and the other is not. Noncitizen parents whose child is a citizen and has a Social Security Number would also be considered mixed status as well.)
Generous as it may seem, the fact that you might be getting another $1,400 doesn’t exactly mean that you won the lottery. It means that you have just been given a temporary helping hand from the US government and what you need to do is the following:
- Prioritize your expenses: This isn’t time to be thinking about getting the next version of the Apple iPhone or what fine dining restaurant to eat at. This is the time for you to be thinking about spending on food, utilities, gas, and rent. Use the money well and if you don’t need it, then don’t spend it. Another crisis could come, and you’ll have to prepare for the possibility that there won’t be enough money for the stimulus checks.
- Create a plan to save up for the next crisis: Put a little money aside every month, so that in case things begin to turn sour in the economy, you’ll have a safety net to fall on.
- Prepare yourself for future tax policies: If you are concerned about possibly being forced to pay more taxes, then you shouldn’t be. As experts from Franklin & Marshall College claim, those making $400,000 or more may end up paying more taxes in the near future, but the good news is that there may be significant tax reductions for those while those making $160,000 or less.
- Keep track of the real estate trends: If you have your money in real estate, then you should know that the property market is more likely to be affected by the pandemic than the change in administration. Recently, property values increased, and suburban markets were revitalized by urban residents moving out of the crowded cities to escape COVID. Experts expect that as the pandemic begins to subside, real estate prices will begin to level off.