‘Money, it just got tighter.’ Many California parents struggle without child tax credit
For Modesto resident Reveca Acosta, living paycheck to paycheck is the norm. So when she received the advance child tax credit payments under the federal American Rescue Plan, her fear of not having enough money for rent and food eased.
But those payments stopped following the last disbursement Dec. 15, after the Senate failed to pass the Build Back Better Act. As the date of what would’ve been 2022’s third monthly check disbursement approaches, families are increasingly experiencing food insecurity and struggling to afford their basic needs, shows a survey conducted by ParentsTogether Action, a parent-led organization focused on issues affecting families.
When the first child tax credit (CTC) payment hit her account in mid-July, 39-year-old Acosta said she was behind on bills and used that money to pay off debt, having just enough left over to buy her two teenage boys shoes for the school year. When the payments started rolling in more consistently, she would go shopping for her family’s personal necessities even though she already had those things at home because she feared not being able to afford them in the future.
“I didn’t want to be without any of that,” she said.
Despite working in public housing full time, Acosta said that prior to the payments, family finances were so tight that she would work on the side, cooking meals to sell and providing personal training. But as inflation rises and with no CTC payment in sight, she said she’ll need to start side work again.
Of the nearly 500 parents surveyed by ParentsTogether from Feb. 4-9, just after the second missed CTC payment, most (75%) said the money made a huge difference for their family and (77%) made them less anxious about their finances, with even more (87%) reporting using all of their payments.
Emergency savings tapped
Since payments have stopped, more than half of parents (57%) say it’s been hard to meet their family’s basic needs and some (41%) say they’ll need to dip into their emergency savings, if they haven’t already.
“Money, it just got tighter,” Acosta said. “Everything is going up. … I have to spend almost double on groceries.”
She said she’s recently accomplished moving into a two-bedroom apartment so her boys could have a room. But now she’s even more rent overburdened, putting more than 30% of her income toward housing.
Most Californians live this way, with one in four renters paying more than 50% of their income toward rent, CalBudget and Policy Center data show. Of the families surveyed in early February about the CTC payments, 19% said they no longer can afford their rent or mortgage.
Acosta said that though she just received a small raise at her job, moving to Texas is on her mind. However, she said she’s not in the financial position to make that move, so in the meantime hopes to find a job that pays more.
As her oldest son celebrates his 16th birthday soon, Acosta said he’s told her he wants to help by getting a job. That’s going to require money for a car, though, which she said she just doesn’t have.
She hasn’t been able to save for her kids’ future, Acosta said, and worries they won’t have the chance to go to college.
She’s far from alone. About 29% of parents surveyed by ParentsTogether said they no longer can save for their children’s future.
“I wish I could save more,” she said. “I feel responsible because I don’t have that kind of savings for them.”
Families buying less
The situation is different for Modesto resident Christina Olidem, 39, who considers her family of eight lower-middle class. She works in hospice care and her husband in construction.
She said she and her husband were fortunate enough to be able to work even at the height of the pandemic, so financially they are doing OK. “Honestly, for us, it’s like a bonus I guess for, you know, working hard,” she said.
Unlike Acosta, Olidem said she was able to save the CTC money and plans to invest it or take a trip. Olidem does say that as a result of inflation, she tries to be even more frugal and doesn’t shop nor go out to eat with her family like they used to.
Parents want better
Though the CTC payments did help her family and she knows less fortunate parents who’ve benefited, Olidem said she doesn’t think another payment is the answer. “Some people do deserve to help … but at the same time, we need to really do our best.”
She added that she knows families in which one parent has had to stop working because of the pandemic disruptions and not being able to afford child care. The government should invest in providing accessible child care and free food for those pursuing higher education, so that those individuals can focus on working, bettering themselves and in turn contributing to society, she said.
As part of his pitch to voters during his State of the Union address Tuesday night, President Joe Biden put a new emphasis on how proposals like extending the child tax credit and bringing down child care costs could bring relief to families as prices rise.
Acosta said she’s hesitant to say another CTC payment is needed. She’s seen on the job how people have benefited from the government’s help, she said, but is troubled to hear that others spend the money on fast food and drugs. She said she wishes there was a better program that would target working parents like herself who don’t receive any assistance and are financially strapped.
“I feel like I do need it,” she said, adding that monthly payments for about four more months would greatly help her financial situation.
This story was originally published March 4, 2022 at 7:00 AM.
