Money and financial stability play a major role in our lives. Unfortunately, one can go through several circumstances that lead to temporary or semi-permanent unavailability of funds. This may even result in a lack of basic necessities to survive. Luckily, the government offers various services and benefits, such as unemployment and stimulus checks, to people that can be availed if the requirements are met. Read on to know more about these.

What are stimulus checks?
A stimulus check is a payment made by the US government to a taxpayer in the form of either paper checks or direct deposits. These are given to people to relieve their financial problems and to encourage them to spend during times of economic distress. This, in turn, aids in giving the economy the boost it needs. These checks can also be a part of a stimulus package designed to support the people and the economy.

Understanding the intricacies of stimulus checks
Even though stimulus checks are direct payments made by the government to the people, multiple factors determine who will receive them and how, and this also includes your tax filing status. For example, if you are added as a dependent under someone else’s tax return, then you cannot qualify for these checks. Sometimes joint taxpayers may also receive double the amount compared to single taxpayers.

Stimulus checks are meant to boost your confidence, ensure your financial security, and also enable you to spend money on the things you deem important. Usually, you can decide if you wish to opt for a paper check or want the money to be deposited directly into your account, and it also ensures a spur in the economy.

There are some criticisms about these aids, with claims that it adds to the existing deficit and simply shifts the economic activity without benefiting the country’s coffers.

Advantages of stimulus checks
As an aid provided by the government, there are various advantages of stimulus checks. These can be used by people in a time of need and also help impact the economy, giving it the nudge it needs during a financial crisis such as the recent pandemic, a recession, etc. Some of the other benefits of stimulus checks include:

Allowing you to reduce your out-of-pocket expense
You may want to use your income or tax refunds to make some other purchases for the month, only to realize that the expenses have drastically exceeded your income. But you do not have to worry, as stimulus checks offer you another medium to spend the money on the things you need without worrying about drowning in debt.

Easily checked and minimum eligibility requirements
In the case of stimulus checks, you do not even need to file your taxes to receive these checks; all you need to do is ensure that you aren’t a dependent under someone else’s tax return, and the checks will be deposited to your bank account or emailed to you.

Increased liquid assets
As these checks are offered as payment by the government directly to you, it ensures that you have money that can easily be spent without the need for conversion or transactions. This amount adds to your liquid assets, making it easier for you to maintain a decent standard of living. It also allows you to try and save for future emergencies.

Helps in taking care of necessities
A personal or financial crisis often leaves you with no income but various avenues for expenditure, such as food, loans, and more. In times like these, stimulus checks play an essential role in helping you take care of your necessities.

Filling budgetary gaps
Every household in America runs on a budget that is divided into medical expenses, education, living expenses, rent, loan, etc. During a crisis, such as a recession, jobs may be lost, and it might be incredibly difficult for you to get back on your feet. Stimulus checks offer to fill in the budgetary gaps during this time and help you take care of your expenses to ensure you aren’t pulled into the vicious cycle of debt.

The US government offers approximately $1400 for every single adult and dependent child living in the country. It also offers each married couple that has met the income requirement a sum of $2800. In addition to this, a mother who claims two children on her taxes may get $4200 as aid.

Note that stimulus checks are different from tax credits. While the former is aid given to help an individual and boost the economy, the latter is used to lower one’s annual tax liability.