Parents give their children stimulus checks from their
Laurynn Vaughn used the stimulus money sent to her and her two daughters aged 4 and 5 for spending and saving.
Source: Laurynn Vaughn
When the final round of stimulus checks arrived for Laurynn Vaughn, 37, and her two daughters, ages 4 and 5, her first thought was to save it.
Before the pandemic, she had around $ 1,000 in savings. But during the health crisis, Vaughn, who runs a day care center in Kissimmee, Florida and is also a notary and litigation supervisor, found that this was nowhere near enough to provide for her family in the event of another emergency.
“I had in the back of my mind that I needed to build savings because I needed at least six months of emergency savings,” she said.
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When the money came, however, other expenses were added. She teaches her daughters at home and has had to pay for the curriculum, rent, groceries, and business and auto insurance.
Even so, of the $ 4,200 she received, she was able to save about $ 2,000. Vaughn is a member of SaverLife, a non-profit organization focused on financial security
“I’m definitely in a better place, but I haven’t met my goals,” she said, adding that she saved about half the amount she would need for six months of living expenses.
The effects of stimulus payments
The final round of economic impact payments to eligible families began in March after President Joe Biden signed the US $ 1.9 trillion bailout plan.
The total was $ 1,400 for individuals with adjusted gross income less than $ 75,000 and married couples filing tax together and earning less than $ 150,000. In addition, payments of $ 1,400 were made to children, including dependents aged 17 and over.
This was a change from the first two economic payments, where children received a lower amount in the first round and did not include dependents aged 17 and over.
The data show that the larger amounts sent to families with dependent children contributed to strengthening economic stability.
According to a study by Patrick Cooney, Assistant Director of Economic Mobility at Poverty Solutions at the University of Michigan, and H. Luke Schaefer, Professor of Justice and Social Policy and Faculty Director at Poverty Solutions. The study, which analyzes data from the Census Bureau, showed that the largest declines coincided with stimulus checks.
A broader range of financial instability dropped 43% between December and April among respondents with children, according to the study. Families made up for housing payments and their mental health improved as stimulus money poured into their households.
“When the federal government took action in the form of robust, broad-based cash transfers that responded to macroeconomic conditions, the hardship was kept in check and, according to some estimates, even decreased,” the co-authors write in the study.
Help children adapt to life in a pandemic
Some families used the money to adapt to the pandemic life and prepare for the new normal after the pandemic.
Monica Ferrey, 43, received payments of $ 1,400 for two of her four children – her son, 10, and daughter, 19, who were eventually eligible for a stimulus check in the third round as a dependent adult. Ferrey’s oldest is 26 years old and therefore away from home, and she has another son, aged 17, who is claimed by his father.
Shortly before the pandemic began, she had started a new full-time job as a community development specialist in San Francisco, which helped the family stay afloat. Still, Ferrey had expected to earn an additional income from part-time work as a beautician and to help organize conventions, side gigs that were slammed by Covid.
Ferrey gave her daughter, who started college this year, her check to buy a desk that can help her with schoolwork at home. The rest went to her savings account.
I had in mind that I had to save because I needed at least six months of emergency savings.
Day care center, notary and process server, mother of two
She bought school supplies and a digital piano for her son so that he could learn to play. She also gave him some pocket money that he could use to buy a video game – one of the few ways he could connect with friends in virtual school.
Ferrey also used part of her stimulus check for a car repair and a family vacation to nearby Monterey, California.
“It was really nice just being able to take her outside because I feel like it was really difficult for everyone to have her inside,” said Ferrey, also a member of SaverLife.
The rest of the money went towards building their emergency savings fund. Before Covid, she had launched a fund but wasn’t too focused on how much it contained. Now she is prepared to save between three and six months in expenses.
“I’m trying to take as much of a large piece as possible and put it away,” she said.
Playing catching up
For some, the money was already spent when they received it. At the start of the pandemic, Brittany Baker, 36, was on leave from her job as a housekeeper at a Dayton, Ohio hospital because she was at high risk for Covid-19 and was pregnant at the time. In the 25 weeks it took her to become unemployed, she defaulted on bills.
Baker has three children – a 4 year old, a 1 year old, and an 11 month old baby. She is also pregnant and will be born in August.
When the final round of economic checks came – including payments of $ 1,400 for her two older children – most of the money went towards paying the rent she owed.
“It was just one way to pay another bill,” she said. Although she got back to work this year, she still has thousands of dollars behind her and is preparing for the birth of her fourth child.
“I did what I had to do, not what I wanted,” said Baker, who is also a SaverLife member.
While Americans are unlikely to get another stimulus check, more help is on the way to families with children. The American Rescue Plan also expanded the child tax credit through the end of the year, allowing half of the credit to be paid to families in monthly payments.
These payments begin on July 15th. Individuals with children with an Adjusted Gross Income of less than $ 75,000 or $ 150,000 for a married couple filing together will receive full credit of $ 3,000 per child 17 and under for the year plus $ 600 Dollars for children under 6 years of age.
This is $ 300 a month for a child under 6 and $ 250 per month for children 6-17 years old. There is no limit to the number of children who can receive the credit if their family is eligible.
Monthly payments will continue through December. When families file their taxes for 2021, they will receive the second half of the credit in the form of a tax refund.
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