Here’s how Americans use their $ 1,400 worth of stimulus checks
wera Rodsawang | Moment | Getty Images
A new poll found that Americans will use it to pay new bills, regardless of income, when new $ 1,400 worth of Covid stimulus checks are introduced.
Bankrate.com found that 45% of Americans plan to use the final round of checks on monthly expenses, followed by 36% who want to use the money for essentials, 32% who want to pay off debts, and 28% who intend to increase their savings. (Respondents were allowed to choose more than one use.)
Notably, only 13% of respondents said they used the $ 1,400 payments on discretionary activities or non-essential items.
The payments of up to $ 1,400 per person plus $ 1,400 per dependent were approved by Congress in March through the American Rescue Plan Act.
To date, the government has made more than 156 million payments totaling approximately $ 372 billion.
“As with the previous two economic cycles, the two most common uses are monthly bills and everyday things,” said Greg McBride, financial analyst at Bankrate.com.
Bankrate.com’s survey also found that the cash infusion is unlikely to last long.
About 61% of respondents said the money could contribute to their financial well-being for less than three months. Meanwhile, 34% said the funds would last for less than a month, including 14% who said it would not help them maintain their financial well-being at all.
The online survey was conducted between March 24th and 26th and included 2,626 adults.
Separate survey data from the US Census Bureau, March 17-29, found that people who received a stimulus payment in the previous seven days used it primarily to pay down debt.
The results could point to a change in financial behavior, just as the financial crisis led Americans to be more conservative with their money.
“Nothing like a recession really highlights the importance of making emergency savings and reducing your debt burden,” said McBride.
Another survey by Bankrate.com found that fewer than 4 in 10 Americans have enough savings to cover an unexpected $ 1,000 spend.
“The first task for most households is that they need to increase their savings in an emergency,” said McBride.
“If this stimulus payment does that, if Americans have more savings and less debt, the economy will do better in the long run,” he said.