Money Health

3 Things You Might Need More Than a Stimulus Check

3 Things You Need More than a Stimulus Check
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A few months ago, stimulus checks were sent out to boost the economy and provide Americans with some financial relief from the pandemic. If you received a stimulus check, you may be wondering whether another one is in your future.

As of now, it’s still not clear if a second round of stimulus checks will be coming. While we wait for news, it’s important to realize that a stimulus check is a one-time payment, and while it will get you through a tough patch, it probably will not set you up for long-term financial success.

If you’d like to strive for financial security into the future, you are probably already thinking about your financial health beyond that check. In fact, here are three things you might need for your financial future more than a stimulus check.

Unemployment benefits

Of course, landing a job in an a recovering industry is a good end goal. In the meantime, however, it’s a smart idea to take advantage of unemployment benefits which can help you cover your expenses while you search for a job.

Since unemployment benefits are generally state-run, get familiar with the specific laws in your state. In addition to traditional unemployment benefits, you may be able to collect Federal Unemployment Compensation and receive an extra $600 per week until July 31st. This additional money can help you stay on your feet, even more than the one time stimulus check.

If you have never been unemployed before, it can be confusing trying to figure out how to get the benefits you really need. Since you don’t automatically receive unemployment when you’re out of work, it’s your job to apply for it. Here’s how:

  • Contact your state’s unemployment insurance program as soon as you’re no longer employed.
  • File a claim online, in-person or via phone, depending on your state’s options and personal preferences. You’ll need to provide information such as the date and address of your former employer.
  • Wait a few weeks to get approved and receive your first benefit check.

Unfortunately, unemployment benefits aren’t a long-term benefit. While they normally expire after 26 weeks, some states offer extended benefits which provide up to 13 additional weeks of compensation. The state you live in will dictate whether you’ll be automatically enrolled in the extended benefits or have to apply for them.

Health insurance

Staying healthy is more important today than ever before, so you can’t afford to go without health insurance. Health insurance can also help you avoid excessive amounts of medical debt and keep your finances healthy in the near and short term. If you lost your employer-sponsored plan, it’s time to explore alternative ways to receive health coverage. Consider these options.

  • COBRA: With the Consolidated Budget Reconciliation Act (COBRA), you can keep your job-sponsored health insurance. At first, COBRA may seem like the ultimate solution. But when you realize you’re responsible for 100% of the premium plus a 2% administrative fee, you’ll want to consider your other options as well.
  • Medicaid: Most people assume they’re not eligible for Medicaid. Since Medicaid recently expanded its eligibility requirements in some states, there’s a better chance now that it could be available to you. It’s a free or low-cost way to obtain coverage.
  • Affordable Care Act Marketplace: You can use the Affordable Care Act Marketplace to find an affordable health insurance plan for your unique needs. If you lost coverage through your employer, are getting married, or having a baby, you can apply for one of these plans during a Special Enrollment Period. You may be able to save money on your plan with the Premium Tax Credit, which is a credit you can use to lower your monthly payment if you meet certain income requirements.
  • A family member’s plan: If your spouse is employed with health insurance coverage, you may be able to add yourself to their plan. You can also receive health insurance through your parents if you’re under 26. Be sure to apply 30 days from when you stop receiving benefits from your former employer.

Debt management

When you have too much debt, it can be difficult to save for the future and meet long-term goals like buying a house, retiring, or saving for college. Debt can also take a toll on your mental well-being and leave you with worry and fear that may impact your overall quality of life. Here are some signs you may have too much debt:

  • Your credit cards, medical bills, and other debts make up more than half your income
  • Your credit cards are maxed out
  • You live paycheck to paycheck, just like many Americans did before the coronavirus
  • You pay your bills late on a regular basis
  • You don’t have an emergency fund

If you’re struggling with debt, there are a number of ways you can improve your situation and steer yourself toward a healthier financial future:

  • Try the debt snowball method: The debt snowball involves paying off your smallest debts first and moving on to larger ones until they are all paid off. Once you pay off the smallest balance, allocate the extra money to the next smallest debt and so on.
  • Pick up a side gig: Unemployment may not be enough to cover your expenses and debts. If this is the case, consider a side gig like delivering groceries or tutoring online, there is still a great deal of demand for these types of services.
  • Ask for loan forbearance: If you ask for loan forbearance, you may receive more time to make your loan payments. When you do this, make sure you have information like your account number or ID, current loan or total owed, and hardship details on hand.

While a stimulus check can help you out during these tough times, these debt management strategies are the keys to planning for a successful financial future.

Debt relief is one more option

If you’re ready to manage your debt and move toward a stronger financial position in the future, it might be time to take a bigger step. Freedom Debt Relief is here to help you understand your options for dealing with your debt, including our debt relief program. Our Certified Debt Consultants can help you find a solution that will put you on the path to a better financial future.

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Anna Baluch is a freelance writer who enjoys writing about all personal finance topics. She’s particularly interested in mortgages, retirement, insurance, and investing.