Parents, we know what a game changer this is: Suddenly, you’re getting these child tax credit payments every month from the federal government.
The payments started landing in bank accounts in mid July — $300 a month for each child under six, and $250 for older children. Even better, these payments will keep coming each month through December!
If you’ve got a family, that money really adds up. Good thing, too — kids are expensive. The remaining five payments are coming via direct deposit on Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15. (If the IRS doesn’t have your direct deposit info, you’ll get a check.) And you’ll get more money back when you file your taxes next year.
So, here’s what we think you should do with this money:
1. Stock Up on Groceries — and Get Paid
Every parent knows that some of the realest spending decisions you make are at the grocery store: Should I buy this or that for dinner? What’s on sale? Can we afford that?
The federal government’s child tax credit payments will certainly help you feed your family — and maybe buy some nicer cuts of meat, or that pricey ice cream you were looking at. And you may as well earn a little money back while your groceries are being bagged up.
A free app called Fetch Rewards will reward you with gift cards just for buying any of hundreds of different items at the grocery store.
Here’s how it works: After you’ve downloaded the app, just take a picture of your receipt showing you purchased an item from one of the brands listed in Fetch. For your efforts, you’ll earn gift cards to places like Amazon or Walmart.
You can download the free Fetch Rewards app here to start getting free gift cards.
Over a million people already have, so they must be onto something.
2. Invest the Money for Your Kids
Another way to financially take care of your family is to invest. Investing is how you build generational wealth.
If you feel like you don’t have enough money to start investing, this sudden extra money could help with that. Also, you really don’t need that much — and you can even get free stocks (worth up to $200!) if you know where to look.
Whether you’ve got $5, $100 or $800 to spare, you can start investing with Robinhood.
Yeah, you’ve probably heard of Robinhood. Both investing beginners and pros love it because it doesn’t charge commission fees, and you can buy and sell stocks for free — no limits. Plus, it’s super easy to use.
What’s best? When you download the app and fund your account (it takes no more than a few minutes), Robinhood drops a share of free stock into your account. It’s random, though, so that stock could be worth anywhere from $2.50 to $200 — a nice boost to help you build your investments.
3. Build Up an Emergency Fund
As a parent, the responsible thing is to have an emergency fund. But as a parent, your money is always so stretched, that’s hard to do.
An emergency fund is a stash of easily accessible money that equals three to six months’ worth of living expenses, in case you unexpectedly lose your job. And millions of us unexpectedly lost our jobs in 2020.
You can save your federal child tax credit payments in an Aspiration account, an online account where you can earn up to 20 times the average interest on your savings balance. (The FDIC reports that the average account earns just .05%.)
You can also earn up to 5% cash back on your debit card purchases.
It takes five minutes to sign up.
4. Stop Paying Your Credit Card Company
Have you got credit card debt? Use your child tax credit payments to pay off a low-interest loan that replaces your credit card debt.
Credit card debt is the most expensive kind of debt, and your credit card company is just getting rich by ripping you off with high interest rates. But a website called AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 2.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
It takes two minutes to see if you qualify for up to $50,000 online. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.
5. Look Out for Your Kids Over the Long Term
These child tax credit payments could help you afford something you haven’t bothered with until now: Life insurance.
There was a surge of interest in life insurance during the pandemic, as more Americans realized they probably needed it.
Also, more people are seeking out no-exam life insurance because they don’t want to go to a doctor’s office for an in-person exam. Companies like Bestow use algorithms instead of medical exams to evaluate applicants.
Rates start at just $16 a month. You could leave your family up to $1 million. The peace of mind knowing your family is taken care of is priceless.
If you’re under the age of 54 and want to get a fast life insurance quote without leaving your home, get a free quote from Bestow.
Mike Brassfield (firstname.lastname@example.org) is a senior writer at The Penny Hoarder. As the parent of 11-year-old twins, he’s wondering: Where have these monthly child tax credit payments from the federal government been all these years?