For many Americans, it's a seemingly never-ending struggle to make their paychecks stretch to cover living expenses such as groceries, rent and electricity — not to mention paying off their debts and saving for the future. This daily strain is one of the reasons why Democratic presidential candidate Andrew Yang's vision of an extra $1,000 a month for every American adult is so appealing. That amount isn't going to change lives overnight, but supporters believe it can better equip Americans who face numerous financial challenges: stagnant wages, rising health-care costs and overwhelming student and personal loan debt. That's how 31-year-old Ross Varner says he would use the extra cash — paying down the $7,600 in credit card debt and roughly $2,000 in medical debt he's racked up over the years. And clearing those debts is especially important now, since he and his wife, Emily, are expecting their first child in about six months. The extra income would also come in handy for major upcoming expense: daycare. "We both work full time, but mostly on opposite schedules," Varner tells CNBC Make It. The Texas couple is hoping Varner's parents, who are both retired, will be able to help out when their work schedules do overlap. But his parents also travel a lot, so daycare still would be necessary sometimes. "We will manage, with or without an extra $1000 a month, but it would certainly ease the stress," Varner adds. https://twitter.com/fatlittlefishy/status/1172199733793841153?s=20

How Yang's version of universal basic income would work

Yang inspired more Americans to imagine what they would do with an extra monthly income when he announced last week during the Democratic presidential debates that his campaign would randomly award 10 American families with $1,000 "Freedom Dividends" each month for an entire year. As of Monday, almost half a million Americans had already applied, including Varner. The contest is open through 11:59 p.m. ET on Thursday, Sept. 19. The Freedom Dividends, according to Yang, will help Americans find jobs as automation reduces the workforce, as well as spur entrepreneurship and reduce poverty. Nearly three out of five Americans say they live paycheck to paycheck, according to Schwab's 2019 Modern Wealth report with wages not keeping up as day-to-day costs continue to soar. A Pew Research report found that the average paycheck has the same purchasing power it did 40 years ago. To fund the Freedom Dividends, Yang proposes consolidating some welfare programs and implementing a value added tax of 10% on businesses. The VAT alone will generate $800 billion in new revenue, according to Yang's campaign. https://twitter.com/AndrewYang/status/1172612395770023937?s=20 Yang is not the only Democratic presidential candidate focused on easing Americans' financial pressures. Several, including Sen. Bernie Sanders (I-VT), have proposed eliminating student loan debt and creating a Medicare For All health-care system that aims to lower out-of-pocket medical expenses. Sen. Elizabeth Warren (D-Mass.) has also taken aim at child-care expenses, proposing universal daycare and preschool to ease the staggering cost facing families. Inga Jeffrey, 41, would also use the extra money as a way to wipe away debt. The 41-year-old Miami resident says she would use a Freedom Dividend to pay off the $40,000 she owes in credit card, medical and student loan debt. With those balances paid off, she'd be able to achieve her goal of relocating back to Georgia, not only for better career opportunities, but also to escape the flood and hurricane zone where she currently lives. "The Freedom Dividend means more to me than just relieving financial stress," Jeffery says. "I would be able to pursue work that I actually want to do, that doesn't harm me," she says, adding that she's been exploited and injured working jobs she's had to take to cover basic expenses over the years. Paying down Americans' debt load may take more than simply giving everyone $1,000 a month. The average American has accrued $28,900 in personal debt, excluding mortgages, according to Northwestern Mutual's 2019 Planning & Progress Study. Even if you put your entire $12,000 annual payment toward that debt, it would still take years to wipe out completely.

Basic income may jump start new business ventures

Universal basic income is about more than just paying down debt. Yang's platform is also about empowering Americans with choices. "It's time to trust ourselves more than our politicians," says Yang, who has made UBI a cornerstone of his presidential campaign. Under his plan, every U.S. citizen over the age of 18 will receive a $1,000 monthly check from the federal government, regardless of where they live or how much they make. Yang contends that giving Americans a basic, guaranteed income would create a "trickle up" economy because people would "spend the money, and it would circulate through our regional economies and neighborhoods, creating millions of jobs." For Seth Lundquist, 32, a monthly $1,000 check from the government would allow him to pursue his dream of opening up his own business. "We want to run an Airbnb out in the country," he says, adding that he also wants to offer sustainability workshops for people interested in earth-sheltered housing and living off the grid. "There's just not a lot of places you can go where you can find out what it's like to live like a Hobbit," he says. A universal basic income would allow Lundquist and his wife, who live in the small town of Sedro-Woolley in Western Washington state to eliminate their outstanding debts and give the couple the freedom to "work out the kinks in the business." Currently, Lundquist works in a rope factory, while his wife is a full-time housekeeper for an assisted living center. He estimates that it would take five and a half years to get their business off the ground. "We could cut that in half with UBI," he says.

Results of existing basic income programs are mixed