The American Rescue Plan Act of 2021 was signed into law on March 11, 2021. Notably, one major component of the act was to increase the Child Tax Credit for 2021. In addition, millions of families started automatically receiving monthly Child Tax Credit Payments of $250 or $300 per child in July.
Specifically, these families didn’t have to take any action to start receiving the funds through the end of 2021. Another important thing to note is how this measure is temporary. In fact, families should not begin to count on these payments moving forward. Unless Congress makes further changes to this law, parents will not receive a monthly child tax credit payment in 2022. As a result, many began to wonder about the best way to use the stimulus dollars. This included Geoff Williams of U.S. News & World Report.
ISEG Research Fellow Siyu Wang Shares Her Top Advice for How to Put Your Child Tax Credit Payments to Good Use
On August 23, 2021, Williams quoted Dr. Siyu Wang, Research Fellow of the Institute for the Study of Economic Growth (ISEG), as a behavioral economics expert. Specifically, Dr. Wang gave context and a key tip in the article “8 Smart Ways to Spend Child Tax Credit Payments” in U.S. News & World Report. Ultimately, she recommends coming up with a plan on how to utilize the funds if you aren’t in a financial jam.
Most behavioral economists would agree that without careful and thorough planning, most people regard a large sum differently than if we received the same amount of money in smaller increments over time,” Wang says. “Imagine you could choose between either receiving your monthly $300 child tax credit payment or a $3,600 lump sum at the end of the tax year. Which one would you choose?
Read the whole article on ways to utilize Child Tax Credit Payments at U.S. News & World Report.