Will Another Stimulus Payment Go Out?

A group of lawmakers has called for a fourth round of stimulus checks, just as the final payments from the third round are starting to hit accounts and mailboxes.

About a month ago, a few U.S. Senators wrote a letter asking the president to consider both recurring direct payments as well as automatic unemployment insurance extensions – as part of the Build Back Better Economic Plan.

Also known as the American Jobs Plan, the bill doesn’t yet mention a fourth stimulus check – similar to those millions have received throughout the pandemic. Rather, it’s a long-term initiative to rescue, recover, and rebuild the country’s financial standing.

In short, the president has not indicated publicly that there will be a fourth stimulus payment, rather – the current focus has been on passing the Build Back Better Plan that aims to improve transportation infrastructure and affordable housing, among other things.

Didn’t receive a third stimulus payment?

Check your eligibility at https://www.irs.gov/coronavirus/get-my-payment

Third economic impact payments did differ from the first two payments under the Trump Administration. Here’s what was different and why you may not have received a third payment:

  • Income phaseout amounts changed. Payments to be reduced for individuals with adjusted gross income of more than $75,000 (or $150,000 if married filing jointly). The reduced payments end at $80,000 for individuals and $160,000 for married couples filing jointly. Those above these levels will not receive any payment.
  • Payment amounts are different. Most families will get $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents would get $1,400, while married filers with two dependents would get $5,600. 
  • Qualifying dependents expanded. Unlike the first two payments, the third payment is not restricted to children under 17. Eligible individuals will get a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents, and grandparents.

For additional information or questions, visit irs.gov

Article Source: irs.gov  

Why is Everything so Expensive Lately?

Houses. Cars. Gas. Why is everything so much more expensive than it was a year ago?

If you think you’re spending more on things like gas and food than you were at this time last year, you’re right. That’s because we seem to be reopening to a more expensive economy than the one that existed pre-pandemic.

It’s not necessarily price gouging. In fact, it has a lot to do with a shortage of materials that manufacturers need to make their products. When supply is low, prices climb for manufacturers – and consumers ultimately often end up paying more for the end product.

It seems silly, but even the cereal Grape-Nuts, has been hard to come by. Kristin DeRock, the Grape-Nuts brand manager, said in a recent interview that making the unique breakfast cereal involves “a proprietary technology and a production process that isn’t easily replicated, which has made it more difficult to shift production to meet demand during this time.”

You’ve probably also noticed it’s been hard to get your hands on things like fitness gear, sofas, and lumber too. The shortages and price increases have to do with several factors. The work from home economy put never before seen pressures on companies that both struggled to estimate demand, and were forced to halt production for safety reasons.

As imports have picked up speed on the back of surging (and erratic) consumer behavior, U.S. shipping ports have become unusually congested. The early 2021 freeze in Texas also compounded these problems, suspending oil production and impacting the manufacturers who rely on it.

Tight capacity, low inventory, and fiscal stimulus have created the “perfect storm” causing both big-ticket and everyday items from hot tubs and bikes to meat and cheese, to cost a whole lot more because of the unusual conditions created by reopening.

So how long will these high prices last?

Experts agree and anticipate these disruptions may last until early 2022. Until then, the stimulus will continue to drive demand and the pandemic will continue to rattle the movement of everyday goods, keeping prices higher into early next year.

5 Smart Ways to Use Your Stimulus Check

As part of the COVID-19 Relief Package, the U.S. government is issuing stimulus checks to many households in an effort to boost the economy and help individuals deal with the financial impact of the global pandemic.

What is the most strategic way to use your stimulus check?

1. Cover the Essentials

Millions of people have lost their jobs or been furloughed, leaving many with smaller incomes. However, expenses have likely remained the same. Before spending your windfall, take a look at the next few months of bills that may come due and make sure you will have enough to pay for:

  • Mortgage or rent and car payments
  • Utilities, cell service and internet
  • Minimum payments on credit cards and debt
  • Insurance for vehicles and/or home

Note: Take advantage of relief programs. If you’re experiencing significant financial strain, check with your lenders and service providers to see if they’re among many who offer relief programs or special payment terms during this time.

2. Build an Emergency Fund

If you’re in a position where you don’t need the money immediately, consider setting it aside in an accessible, protected account to use when absolutely necessary. There’s no way to know how long the U.S. economy will suffer as a result of the crisis or whether your financial status may change in coming months. Stashing it away for safekeeping may help you ease a potential impending financial burden down the road.

3. Pay Off Debt

If you’re confident that you’ll have enough to cover basic expenses for the next few months, consider having your stimulus check go toward paying off credit card debt, medical bills, car payments or student loans. While some institutions may offer relief programs in the short term, those funds will still be due later on. Prioritize by paying off debt with the highest interest rates first.

4. Invest

If you’ve established a healthy emergency fund and believe you’ll remain financially secure, you may consider contributing to your retirement through a variety of investment strategies. Markets experienced some turbulence in 2020, and have since stabilized. Long-term investments may prove promising.

Note: If you’d like to learn more about how planning ahead today can pay off in your future, contact a financial professional located at your credit union.

5. Be Generous

The global pandemic has put a strain on many nonprofits as the need for the goods and services they provide climbs to an all-time high. If you’re in a financial position to help others during this time of crisis, find a nonprofit that you feel passionate about and consider donating a portion (or all) of your stimulus check funds to those who need it most.

Representatives are registered, securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, which is not an affiliate of the credit union. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/ NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.

CBSI-3053187.2-1220-0123

The Answers to Your Second Stimulus Payment Questions

The second round of stimulus checks are on their way, thanks to the signing of the COVID RELATED TAX RELIEF ACT OF 2020 that was just recently signed on 12/27/2020. Since many different amounts and restrictions were thrown around during the negotiations, most people probably have a lot of questions about these new stimulus checks. At the top of the list: How much will I get? And when will I get it?

Here’s a few answers to the questions you may have:

Question: When will I get my second stimulus check?

Answer: Soon! The IRS has already started sending out $600 payments. If the amount is later raised – anyone who has already received a $600 second stimulus check will be sent another payment as quickly as possible for the additional amount they are owed.

If the IRS already has your bank account information—either from a recent tax payment that you made or from a tax refund sent to you, then expect to get your second stimulus check faster. That’s because the IRS will be able to directly deposit the payment into your bank account. The IRS can also make a second stimulus payment to a Direct Express debit card account, a U.S. Debit Card account, or other Treasury-sponsored account. Otherwise, you’ll get a paper check in the mail.

Question: How much money will I get?

Answer: Right now, you’ll get $600. Those who made more than $75,000 will get less. A married couple making up to $150,000 will receive $1,200. Children under 17 will get $600. Therefore, the most a family of four could get is $2,400. The amount will be based on the income you claimed on your 2019 federal tax return. $300 in additional unemployment benefits will be made to jobless workers, to expire on 3/14/2021.

Question: Will I have to pay taxes on it?

Answer: No. There are no strings attached and you will not have to pay taxes on this second stimulus payment.

If you’re wondering when you can expect your stimulus funds, please click here. This will take you directly to the IRS website where you can check your payment status.

If you know your payment will be directly deposited into your First Financial account, click here for online banking or view your account within our mobile app.

3 Ways to Stop Overspending During These Times

Given the current pandemic that continues, you’re most likely more mindful of your finances these days. Even if you have a budget set up, you may still find that money feels a little tight right now. The last thing you want to do in these current times, is rack up unnecessary debt or spend too much money. Here are 3 easy ways to stop overspending.

Cut back on takeout: It’s great to support local businesses right now, but don’t overdo it. Have you been consistently making trips to your favorite fast food drive thru or ordering takeout/delivery? If your takeout budget has increased, your grocery budget needs to decrease. Be mindful of what you are spending on food and if the takeout is taking over your budget.

Pay with cash: After you pay your bills for the month, try to use cash for anything else. Other than necessities that you may still want to purchase online for health and safety reasons, are you shopping online and using a card just to pass the time or buy items you don’t really need? Using cash may prevent you from adding that one extra item to your Amazon or other online shopping cart.

Make do with what you have: Delayed events are happening all over. Movies and concerts have either been pushed back or cancelled. As much as you might want to spend money you normally would spend on summer concert tickets on something else, keep it in your savings account. For now – watch a movie on Netflix you haven’t seen yet, or on your cable network’s free on demand movies. You can also login to YouTube and view a past live concert at no cost. There are many ways to improvise and save money!

 

Article Source: John Pettit for CUInsight.com

Student Loan Payment Changes During COVID-19

With unemployment levels rising and many employers cutting work hours, large numbers of college grads are now struggling to meet their student loan payments. Thankfully, the federal government has passed legislation to help ease this burden. However, many borrowers are confused about the terms and conditions of these changes. Here’s all you need to know about changes to student loan debt due to the coronavirus pandemic.

All federal student loan payments are automatically suspended for six months.

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020 – all federal student loan payments are suspended, interest-free, through September 30, 2020. If borrowers continue making payments, the full amount will be applied to the principal of the loan. The suspension applies to all federal student loans owned by the Department of Education, some Federal Family Education Loans (FFEL), as well as some Perkins Loans. Students do not have to take any action or pay any fees for the suspension to take effect.

Additionally, during the suspension period, the CARES Act does not allow student loan servicers to report non-payments as missed payments to the credit bureaus. Therefore, the suspension should not have a negative effect on borrowers’ credit scores.

If you’re not sure whether your student loan is federally owned, you can look it up on the Federal Student Aid (FSA) website. Be sure to have your FSA ID handy so you can sign in and look up your loan. You can also call your loan servicer directly as well.

Contact information for federal student loan servicers:

CornerStone: 1-800-663-1662

FedLoan Servicing (PHEAA): 1-800-699-2908

Granite State (GSMR): 1-888-556-0022

Great Lakes Educational Loan Services, Inc.: 1-800-236-4300

HESC/Edfinancial: 1-855-337-6884

MOHELA: 1-888-866-4352

Navient: 1-800-722-1300

Nelnet: 1-888-486-4722

OSLA Servicing: 1-866-264-9762

ECSI: 1-866-313-3793

Suspended payments count toward Public Service Loan Forgiveness and Loan Rehabilitation. 

Public Service Loan Forgiveness (PSLF) is a federal program allowing borrowers to have their student loans forgiven, tax-free – with the stipulation that they work in the public sector and make 120 qualifying monthly payments. A disruption of these 120 payments would typically disqualify a borrower from the program. According to the CARES Act, suspended payments will be treated as regular payments toward PSLF. This ensures that borrowers who have been working toward these programs will not lose the progress they’ve made toward loan forgiveness.

The same rule applies to individuals participating in Student Loan Rehabilitation, during which borrowers who have defaulted on student loans – must make 9 out of 10 consecutive monthly payments in order to bring their loans out of default. The U.S. Department of Education will consider the six-month suspension on payments as if regular payments were being made toward rehabilitation.

Some states and private lenders are offering student loan aid for struggling borrowers.

If your student loan is not federally owned and you are struggling to make your payments, there may still be options available – such as loan deferment or forbearance. If you are in need of such assistance, contact your lender directly to discuss your options.

Consider an income-driven repayment plan.

If you have an FFEL that is ineligible for suspension, you may be able to lower your monthly payments by enrolling in an income-based repayment plan. This would adjust your monthly student loan payment amount according to your discretionary income. If your salary was cut as a result of COVID-19, or you are currently unemployed – these plans can provide relief by making your monthly payments more manageable.

Still have questions about your student loan payments during this time? It’s always a good idea to reach out to your lender and find out what options are available to you.

Article Source: CUcontent.com