Families of young adults can get hundreds of dollars
The child tax credit — beefed up for 2021 to include a series of cash payments, under the massive pandemic rescue bill President Joe Biden signed in March — is typically available only if you have kids 17 and younger.
But a one-time payment of $500, which can be taken as a tax refund, is available for familes of children ages 18 to 24.
The IRS has laid out a few eligibility conditions:
- A child who's 18 years old must be claimed as a dependent.
- Children 19 to 24 must be attending college full time.
- Each child must have a Social Security number.
The income limits associated with the expanded child credit are in effect for these payments, too. The money starts phasing out if you earn more than $75,000 as a single tax filer or $150,000 if you're a married couple that files jointly. For head-of-household filers, the income threshold is $112,500.
Even if you don’t normally file taxes, you can still apply for the $500 credit using the IRS child tax credit non-filer sign-up tool.
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Other ways to boost your budget
If your family isn’t eligible for the child tax credit money or the special $500 payment for young adult children, there are other ways you can carve out a little more financial breathing room.
Refinance your mortgage. If you've got a mortgage and haven't refinanced in the past year, you could be leaving a lot of money on the table. Nearly half the homeowners who took advantage of the pandemic's historically low mortgage rates are now saving $300 or more a month, according to a recent Zillow survey. Thirty-year mortgage rates are still under 3%, so compare today’s refinance offers and see how much you could save.
Draw down your debt. Carrying multiple high-interest debts, like credit card balances, can make it hard to get ahead financially. It’s a problem you can address by folding your balances into a single, lower-interest debt consolidation loan. You’ll reduce the overall cost of your debt — and pay it off faster.
Cut insurance costs. When was the last time you checked to see if you might be overpaying for car insurance? A little comparison shopping could help you find a much cheaper policy. The same strategy can help you save on homeowners insurance, too.
Put your pennies into a portfolio. You don’t need much extra cash to start earning extra money in the stock market. A popular app allows you to build a diversified portfolio using little more than "spare change" from your everyday purchases.
What are your spending habits?
When you know where your money is going, you can make better financial decisions.
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