PINELLAS COUNTY, Fla. — Parents may start to feel a financial pinch come January 1 as the child tax credit expansion is set to expire.
“This has been a godsend, without this child tax credit there would probably be no Christmas for my children this year,” said Amy Cheek, a mom of three in Pinellas County.
As 2021 fades away, Cheek is reminded of how crucial the extra money in her bank account from the child tax credit expansion really was.
“It’s drastically improved our quality of life. It seems like each month something happens, whether [it’s] car trouble right now,” Cheek said. “We actually have two cars, they’re both broken down.”
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The expansion started in July and, according to the Center on Poverty & Social Policy at Columbia University, it kept three million kids out of poverty nationwide in the first month alone. In November, the number went up by another 800,000.
“It’s great when the government comes up with these ideas, it does show us that we have a great need, I mean obviously we have a situation of poverty, so we want to take care of our own country first and our own children and make sure that they’re fed and taken care of, but it goes to show you we need to fix the system for sure,” said Celine Pastore, a retirement advisor.
The expansion meant parents could receive up to $3,600 a year for each child younger than six; $3,000 per child older than six. That’s compared to $2,000 per child a year before the expansion. It also made it so parents received the payments monthly, versus a lump sum tacked on to their income tax refund.
“It’s going to definitely be a pinch between that and inflation, it’s getting more and more difficult to just make ends meet,” said Pastore.
But, she said families should never rely on these types of government payments but instead, put it towards a goal like a better paying job or a better paying position at your current company.
“If you think about it, feed a man a fish, feed him for a day, teach a man to fish, feed him for life, I would advise when you do have those one off bonuses or some tax credits from the government, that’s a great time to invest in yourself and your education,” she said.
But, what can you do right now to prepare? Create a budget of your monthly spending patterns because it may reveal some things you can cut. If you get to a point where saving is possible — make it a goal to have at least three months' worth of money to cover your living expenses.
Congress has until the end of the month to decide whether it will extend the expansion.
