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As new $ 1,400 Covid stimulus checks come in, Americans use them to pay monthly bills regardless of their income, a new survey finds.
Bankrate.com found that 45% of Americans plan to use the latest round of checks for monthly expenses, followed by 36% plan to use the money for daily necessities, 32% plan to pay off debt, and 28% plan intend to contribute to their savings. (Respondents were allowed to choose more than one use.)
Notably, only 13% of the survey respondents said they would spend the $ 1,400 payments on discretionary activities or non-essential items.
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 for a total of approximately $ 372 billion.
“As with the two previous rounds of stimulation, monthly bills and daily necessities are the two most common uses,” said Greg McBride, chief financial analyst at Bankrate.com.
The Bankrate.com investigation also found that the money injection is unlikely to last.
About 61% of respondents said the money can contribute to their financial well-being for less than three months. Meanwhile, 34% said the funds would last less than a month, including 14% saying it wouldn’t help them maintain their financial well-being at all.
The online survey was conducted between March 24 and March 26 and included 2,626 adults.
Separate survey data from the US Census Bureau from March 17 to March 29 found that people who received a stimulus payment in the past seven days usually used it to pay off debt.
The results could point to changing financial behavior, just as the financial crisis prompted Americans to be more conservative with their money.
“Nothing quite like a recession really underscores the importance of emergency savings and reducing your debt burden,” said McBride.
That’s as another study from Bankrate.com found that less than 4 in 10 Americans have enough savings to cover an unexpected $ 1,000 expense.
“The first task for most households is to boost their savings,” said McBride.
“If this stimulus payment does that, the economy will perform better in the long run if Americans have more savings and less debt,” he said.