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Using Your Inflation Relief Check To Make A Dent In Your Debt


This summer, the state government of Florida sent $450 checks to about 59,000 families.  Gov. Ron DeSantis and other Florida officials decided to use the $35.5 million in the state’s budget for the benefit of the Floridian families that it determined needed the money the most.  Florida’s leaders have branded the checks as an inflation relief stimulus analogous to the stimulus checks that the federal government sent to families likely to experience financial hardship due to the COVID-19 pandemic in 2020 and 2021.  The beneficiaries are among the neediest households with minor children, including TANF recipients and families with foster children.  The arrival of the checks coincided with the back-to-school tax holiday in late July and early August, and the assumption was that most recipients would use the money on new school clothes and school supplies for their children.  If you still haven’t decided what to do with your stimulus check or tax refund and are wondering about the best ways to use a small windfall to make a dent in your debt and build your credit, contact a Boca Raton debt lawyer.

Open a Secured Credit Card Account

As unfair as it sounds, making payments on time for Buy Now Pay Later (BNPL) purchases does not boost your credit score.  By making the same purchases on a credit card and paying them down with the same regularity, you could increase your creditworthiness quickly.  If you have no credit history or a low credit score, the best place to start is with a secured credit card.  Most secured credit cards have a credit limit of $200, the amount it costs to open the account.  Once you make payments on time for enough months, the credit card company refunds your $200 deposit, and the card becomes an unsecured credit card (a regular credit card), and the credit limit slowly increases if you keep making monthly payments on time.

Start a Debt Repayment Snowball

Given the high debt burden of most households, $450 sounds like a drop in the bucket.  If an inflation relief check can pay off all your debts, you obviously do not qualify for one.  To make $450 give you the most debt relief, pay it toward the debt with the highest interest rate.  This will lower the total minimum payments you owe on your debts each month.  If you use it to pay off your smallest debt (and, if possible, also to pay down your second smallest one), this will also leave more money in your budget in subsequent months that does not need to go straight to debt repayment.

Make a Necessary Purchase Without Borrowing

Every penny that you don’t borrow decreases your debt burden over time.  A wise use of a modest windfall is to buy something that you would otherwise need to pay in installments.  Don’t think of it as a splurge; think of it as freeing up money in your budget for the upcoming months.

Contact a South Florida Debt Lawyer About Opportunities to Get Out of Debt

A South Florida debt lawyer can help you if you need to pay down your debts but have limited resources to do so.  Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.



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