The child tax credit could contribute up to $3,600 per child and could make a huge difference in these troubled times. Experts have given valuable inputs on ways to make the best use of the money.
Starting July, you could receive the first of a series of payments that are installments of the modified child tax payments announced by President Biden. This payment is usually credited after-tax returns. But given the emergency-like situation, the payments have been paid before time in several parts.
Half of the amount will come in from July 2021 through December 2021. The rest 50% will be given as a tax refund after you file the tax returns in 2022. The amount will depend on the age of your child. Children under 6 will contribute $3,600 per child while those between 6 and 17 will bring in $3,000.
Making The Most Of The Child Tax Credit
If invested rightly, this amount could help you bring stability to your finances. Experts have given valuable inputs on using the money for various purposes from meeting immediate needs, decreasing debts, to investing for maximum returns.
It will be more than a couple of months before you get your first check. So you have time to plan your expenditure. Decide beforehand whether you want to decrease your debts or invest for future returns. The important thing is to plan now.
Basic needs come first. It could be groceries, medicines, repairs. But make sure that the expenses are necessary before spending it from your child’s tax credit amount.
This should be your high-priority area. These toxic debts eat into your earnings. Try to pay off the ones with the highest interest including credit cards from your child tax credit earnings.
This child tax credit acts as a financial cushion and saves you from toxic borrowings during an emergency. Start with a modest goal and gradually increase the buffer.
This fund could also be saved for future long-term expenditure. It could be the down payment for your home, saving for your child’s college education, etc.
Get help from a debt reduction expert to create a long-term plan to reduce your debts from home mortgage, student loan, or credit cards.
Curb down on the impulsive purchase. Times are tough and you may end up regretting the expense later. Wait for the turnaround before loosening on the purse strings.