You may be one of the many who will begin receiving child tax credits on a monthly basis. Congratulations – you’ll have a little extra money in your pocket! But how will you use that money and make the most of it? American State Bank is here to offer some great suggestions on what you can do with your child tax credits to make more out of that money.

Pay What You Need To

Right away, you’ll want to look at what bills you need to pay. Start with your essentials such as rent/mortgage, debt payments, monthly utility bills and so on. These are your first priority to keep you out of any debt crisis. Once this has been done, you can move onto the next suggestions.

Don’t Think Of It As A Lump Sum

Half of the amount is paid monthly from July through the end of the year. Then the other half is paid when you file your 2021 tax returns in 2022. For example, if you were to qualify for $3,600, then you get $300/month for 6 months. Treat this as extra income over the next 6 months and decide how you’ll utilize it effectively. If you think of it as just getting $3,600 and plan to spend that on a big purchase when you get it, you lose the chance of making that money go further.

Save & Invest It

You can place these credits into a savings account to create an emergency fund for the unexpected. Or you could use that savings and put it towards something related to your child when the time comes such as helping them purchase a used car or give it to them to go towards college. Start looking at your options to invest for the future of your family. This can be in your 401(k), IRA or even a college 529 plan for your child.

See Where You Are Financially

It’s important to take inventory of where you are at financially and what your financial goals are. Sit down and discuss this with your partner if you aren’t single. When you’ve decided on your financial goals, this can help you decide where to the place that money. Do you need to build an emergency fund? Are you planning on helping put money towards college or a car for your child? Are you saving for retirement? All of these things are something you’ll want to discuss so you can make educated next steps.

We hope these solutions guide you into making more out of your money. If you are looking for a safe place to store that money depending on what you decide your goals are, contact us!