Stimulus Update: Here’s How People Are Spending Their Monthly Payments

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The American Rescue Plan distributed funds in a variety of ways to the American people. One of these methods was to increase the federal Child Tax Credit. Between July and September 2021, the first half of that credit will be provided in monthly instalments. Many of the recipients are utilizing the funds to meet some of their most basic requirements.

According to the IRS, nearly 35 million households got $300 each kid under the age of six and $250 per child between the ages of six and seventeen. With each instalment, it deposits $15 billion into households’ bank accounts.

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The spending data comes from the United States Census Bureau. According to the company’s Household Pulse Survey, many families are spending the money on essential necessities, but they also claimed they utilized it for many purposes. Approximately half of those who got the Child Tax Credit stated they spent it on food from July to September. Approximately four out of ten households indicated they utilized the money to pay expenses, such as rent, mortgage, or utilities.

When schools reopened in September, more money was spent on school supplies, according to the Census Bureau. In late July, 22% of families used the funds to pay for school-related expenditures. By late August and early September, the figure had risen to 34%. In late September, that figure had risen to 30%. As you might expect, expenditure on classroom supplies differed according on the child’s age. Those with school-aged children were far more likely than families with children under the age of six to spend money on school supplies.

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Around 10% of households utilized the funds to pay for child care. Approximately four out of ten households who got the first three cheques claimed they utilized the money to pay off debt.

The question of whether or not to keep the Child Tax Credit payments is still being argued. The Biden administration wants to extend the enhanced credit for another year and then make it permanent. Some senators in Washington, D.C., including Democratic West Virginia Senator Joe Manchin, want to make adjustments to the tax credit, including adding a job requirement to the payouts.

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