wera Rodsawang | Moment | Getty Images
As new $ 1,400 Covid stimulus checks begin, Americans are using them to pay monthly bills, regardless of their income, a new survey finds.
Bankrate.com found that 45% of Americans plan to use the last round of checks for monthly expenses, followed by 36% who want to use the money for daily necessities, 32% who want to pay off debt and 28% who plan to is to add their savings. (Respondents may choose more than one use.)
Only 13% of respondents said they would pay $ 1,400 payments for 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 by the U.S. Rescue Plan Act.
To date, the government has sent more than 156 million payments totaling $ 372 billion.
“As with the previous two rounds of stimulus, monthly bills and daily requirements are the two most common uses,” said Greg McBride, chief financial officer at Bankrate.com.
The survey by Bankrate.com also found that the cash infusion is unlikely to last long.
About 61% of respondents said that the money can contribute to their financial well-being in less than three months. Meanwhile, 34% said the funds would last 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 24 and March 26 and included 2626 adults.
Separate data from the U.S. Census Bureau from March 17 to March 29 found that people who had received an incentive payment in the past seven days mostly used it to pay off debt.
The results may indicate a change in financial behavior, just as the financial crisis prompted Americans to be more conservative with their money.
“Nothing like a recession really emphasizes the importance of emergency savings and reducing your debt burden,” McBride said.
Another survey by Bankrate.com shows that less than four in ten Americans have enough savings to cover an unexpected $ 1,000 expense.
“The first business for most households is to increase their emergency savings,” McBride said.
“If this stimulus payment does, the economy will do better in the long run if Americans save more and have less debt,” he said.