GRAND RAPIDS — The advanced child tax credit payments will start hitting parents’ bank accounts July 15.
It’s a part of the American Rescue Plan for families earning less than $150,000 (or $75,000 for a single earner), they will receive $250 from July to December for kids 6 to 17 years of age.
Parents will earn $300 for children under the age of 6. Essentially, you are getting half of what you would receive when you file your taxes in 2021 early.
We sat down with a financial expert who shared some advice on how to make the most of your money.
This is the third round of stimulus checks,” said Rick Meyers. “The government between the Trump and Biden administrations has now spent or authorized to spend $6 trillion for this. Now, that doesn't seem like much. But to put it in perspective, in the first 220 years of this nation, we didn't even have a trillion-dollar debt. And so to have $6 trillion, it's truly a mind-boggling number.”
Rick Meyers, a certified financial expert with Integrated Financial Services, explains how this is not really free money.
“Money has two primary values,” he said. “It's a unit of exchange, we use it to buy things and for goods and services. But also it's a store of value. So, when we earn money, and we put it away in our investments when more dollars are created, it actually dilutes or takes away some of the purchasing power of those old dollars that we had saved. And the government really can't give free money away. It costs someone something. It dilutes the value of that, and we see it as inflation.”
That is why Meyers says what you do with it is important.
“The plan was designed to put the money in the hands of the people now to help in the recovery. So there are a lot of families of course that are struggling either with mortgage payments, housing, rent, food, and so for individuals that are struggling, they're probably just going to be using those for essentials,” said Meyers. “They're not going to be putting away for their college, child's college education or going to Disney World. They're probably just going to be paying bills or maybe paying off debt.”
Meyers says if you don’t need the money for household essentials, take this as a learning opportunity, investing in your child’s future by purchasing permanent life insurance for them or saving for college.
“Put it away in a separate account, and maybe teach the child that this is how we build for the future,” he said. “But putting it into a high yield savings account certainly is one option, teaching the child but you're building to the future, that's a good thing to do. Secondly, funding a 529 plan, a college education plan, or put it in the Michigan Education Trust. These would be also good things to consider doing. So the money will build for their future."
You can head to IRS.gov to check if you are eligible and already automatically enrolled to receive the advanced payments.
The Better Business Bureau is also warning people to look out for child tax credit scams. You can find more information about that by clicking here.
We also talked to an expert with Davenport University on FOX 17 Morning News. You can watch the interviews above as well as on your Roku, Fire TV or Apple streaming devices.