Take Advantage Of These Government Savings Programs
Blog | April 3rd, 2019
No matter your financial situation, you should be looking to save money. A recent study from Bankrate found that 20 percent of Americans don’t keep a penny of their annual income.
Perhaps more concerning is the fact that roughly 40 percent of Americans have less than $10,000 saved when they retire. Savings is always something that should be on the back of your mind.
Unfortunately, many Americans don’t save because they don’t believe they have the means to do so. However, this may not be the case. The US Government offers savings programs that could help get you free money. Below, we’ve detailed a few of the most common government savings programs available today.
If you’re a college student or the parent of a college student, you could apply for a Pell Grant. The government typically awards Pell Grants to undergraduate students. The students cannot have already obtained a:
Pell Grants are different from federal loans. If you apply for a loan, you’ll have to repay it, likely with interest. However, the government, for the most part, does not make you repay Pell Grants. There are a few circumstances in which you may have to repay a portion of your Pell Grant. The government awards grant amounts after considering numerous criteria, including:
Cost of Attendance
Furthermore, your Pell Grant application could also make you eligible for other grants at the state level. So, if you’re a college student who has yet to graduate, it could be in your best interest to complete a Pell Grant application to help you save money on education costs.
There are also other federal grants available that serve the same purpose, including:
The Iraq and Afghanistan Service Grant
The Federal Supplemental Educational Opportunity Grant
The Teacher Education Assistance for College and Higher Education Grant
Buying a Home
If you’re buying a home, there could be other government savings programs available to help. Grants are available at both the federal and state levels. Like the Pell Grant, homeowner grants are free money that you could put toward the down payment on your home.
The awards are designed explicitly to help cover the upfront costs of home ownership.
The Federal Housing Administration provides a list of down payment assistance programs. The site organizes the programs by state. Although the conditions of the grant can vary from state to state, most don’t require you to repay unless you refinance, sell, or leave the property within the first five years of ownership.
Lastly, you may be eligible for a housing grant even if you have excellent credit and make an average salary. For instance, in the District of Columbia, the cap for housing assistance is more than $132,000. There’s no harm in completing an application to see if you can take advantage of the housing programs in your respective area.
Health insurance is quite expensive, costing thousands of dollars per year. However, many people are unaware that there are tax credits available to help offset the cost. If you purchase your healthcare through the federal government marketplace, you could be eligible for a credit toward your premiums. You have the option to use the credit as you choose, putting it toward:
A tax credit on your annual return
Direct payment to your insurance provider
Lowering your monthly payments
Reclaim Money You’re Owed
There’s a good chance that the government could owe you money in some form or fashion. For instance, the Internal Revenue Service recently indicated that they have roughly $1.4 billion in unclaimed money from 2015. And, it’s not just money from taxes that you could potentially be eligible to reclaim. It could be in the form of anything from a lost savings bonds to unclaimed life insurance.
Even if a private company initially owed you money, the government is still involved. That’s because companies are required to turn money over to the government if they can’t locate the original owner. So, for instance, imagine you paid a deposit to a local utility company and then moved.
If you did not provide your new address to the utility company, they’d give your deposit to the government.
Fortunately, there are resources available to help you track down lost funds. For instance, the National Association of State Treasurers has a site that allows you to see if you have any unclaimed money. You’ll need to provide information such as your Social Security number and previous addresses. The search only takes a few minutes and could be well worth your time.
Pay for Daycare
One of the most significant expenses of having children is daycare. Daycare costs parents thousands of dollars per year. However, it’s a considerable expense, as many parents can’t afford to quit their jobs to stay at home with their children.
Fortunately, the government offers resources that could help offset the cost of daycare.
For instance, the Child Care and Development Fund is explicitly intended to help low-income families pay for daycare services. The U.S. Department of Health and Human Services controls the fund, although they distribute the fund to various states and territories.
If you wish to apply for the grant, you’ll need to go through your local state.
You will not need to repay these grants. However, income is one of the sole factors that determine your eligibility. Parents can also not apply the awards to daycare if the child is older than the age of 13.