Starting on July 15, and every month for the rest of the year, parents with young children will receive money from the IRS to help support families. For some, this money is a much needed help in a time of need, and for others, a nice surprise. If you have a child 6 years old and younger, you’ll get $300 a month, and for children 6 to 17, you’ll get $250 a month.
But, just like the earlier stimulus money, this child tax credit can be put to really good use. Don’t just frivolously spend it on non-essentials. Use this money the best way possible to put you and your family in the best financial position possible going forward.
Paying Off Debts
Debt is a weight that is slowing down your finances and family. Not only are you losing money to interest, it’s income you’re losing every month to pay it off. Wouldn’t your life be better wtih at least one less debt payment?
Putting your child care tax money toward your debt is a smart use for it. If you have some smaller debts, like a credit card or personal loan, this tax credit could be a huge help paying it off. Depending on the number of kids you have and the size of the debt, you could even completely pay off a debt you have.
If you have a larger debt, like a car payment or a mortgage, this extra money could go to paying down your debt even faster. Every cent you pay extra each month goes to the principle, meaning in the end you’ll end up paying less in interest and get rid of the loan faster!
Pad Your Savings
If the pandemic and subsequent events drained your savings, this extra money is great for filling it back up. Whether you’re below the suggested savings of a couple thousand in your savings, or if you have your own savings goal, this money can help you reach it.
The next six months can be great for growing your savings to a healthy amount and keep you safe in case of emergency. That way, if a car breaks down or you have a different unexpected expense, you are ready for it!
Put It Towards a Special Savings Goal
Is there something you want to buy for your family? Maybe you’re looking at getting your first home, or a new car, or a big family vacation? This extra income can go a long way towards your current savings goal.
Combine this extra couple hundred of dollars with what you are regularly saving and you’ll see that savings grow like crazy. This could cut months off your savings goal and either let you grow it even further or use it sooner!
If you do have a special goal you’re saving for, Pioneer can help with our Special Purpose Savings account. It can help keep your money separate from your other accounts and focus your savings efforts.
Putting the Money Towards Your Children’s Future
If you don’t need the money right now, then put it towards your childrens’ future. Likely, they’ll have larger expenses down the road they could use the extra cash for like buying their first car, attending college, or saving up for a wedding. If you look ahead and help them save, it can give a huge head start when they reach adulthood.
If you are looking for a place to save this money, Pioneer has two solutions. The first is the Super Star Youth Savings account, where your child is directly involved. You could give the child tax money to them, and they can make the deposit. The other account is a Uniform Transfer to Minor account, where you act as a steward and manage the account until they’re 21 years old.
Support the Local Economy
If you don’t have a pressing need for the child tax money, you can always spend it and support your local economy. Not only do you get items you need or want, you’re also helping support your community and others when you shop locally.
This could include grocery shopping and buying essentials or have a fun night on the town. As long as you spend your money with local businesses rather than larger corporations, you’re helping support your fellow community members and keeping money in your local economy.
If you’re looking for some local businesses, look no further than Pioneer’s Buy Local program. We’ve partnered with local businesses in our communities to help them grow and earn you extra Rewards! points as long as you use your Pioneer VISA credit card.
Learn More About Buy Local