LOUISVILLE, Ky. (WAVE) - At the end of the month, millions of Americans are set to lose $600 of extra unemployment money each week. In Washington, it’s still up for debate whether those enhanced payments should continue.
Tim Riney from Family Wealth Group was a guest on WAVE 3 News Weekend Sunrise to explain to people on how to make ends meet.
Riney said unemployment claims hit a record high and the U.S. fell into a recession in the first quarter of this year. The CARES Act expanded unemployment benefits, giving laid-off workers an extra $600 each week. That’s on top of the benefits they receive from the state. Those additional payments are set to end on July 25.
Lawmakers have different ideas about how to keep helping Americans financially.
The House passed the HEROES Act in May, but discussions and action have mostly been stalled since, according to Riney. Congress returns from recess on Monday, July 29, and the Senate is expected to present their draft for a second stimulus package.
Riney said it’s not known what this proposal will look like but, there has been talk from both parties about offering up more financial support to Americans.
So many Americans are hoping for a second stimulus check. The first round of stimulus checks this spring provided a payment of up to $1,200 for individuals and $500 per child.
It’s not yet known what the final proposal for stimulus checks will look like, but recently the White House, as well as many Republicans and Democrats, have come out in favor of additional stimulus payments in some form.
Riney said last month the Senate majority leader suggested a possible income cap for a new round of payments and mentioned the idea of distributing them to those making less than $40,000 a year.
Without knowing what congress will agree to, Riney said there are things you can do to help yourself financially.
The first thing is budget. List all your expenses, including fixed expenses like your mortgage, car payment and cell phone bill. It should also include variable expenses, such as utility payments, groceries and entertainment. For a budget worksheet go to thefamilywealthgroup.com.
You should also determine how much income you have coming in and create a second budget to reflect a possible loss of extra unemployment pay.
Riney said if your expenses still outweigh your income, look at temporary cuts. Your gas, entertainment and dining out expenses are likely lower right now. But you might also have to consider other cuts, like your cable bill or pausing subscription services.
You should also review your savings, Riney said. If you are laid off or facing extreme financial difficulty right now, it could mean that you need to pull from your emergency fund or other savings accounts. If you decide to do that, Riney said be conservative about how much you use, and make a plan for replenishing it when your income stabilizes again.
Ideally, you want 3-6 months of expenses set aside in case of another unexpected situation. Riney said the CARES Act also allows those under the age of 59-and-a-half to take a distribution of up to $100,000 from their 401(k) without paying a 10% penalty.
Be sure to talk with a financial professional about your options before withdrawing money from your retirement accounts.