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As new $ 1,400 Covid stimulus checks appear, Americans are using them to pay monthly bills, regardless of their income, according to a new survey.
Bankrate.com found that 45% of Americans plan to use the last round of checks for monthly expenses, followed by 36% who plan to use the money for day-to-day living, 32% who want to pay debt and 28% they intend to add to their savings. (Respondents were able to choose more than one use.)
It should be noted that only 13% of respondents said they would pay $ 1,400 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 under the U.S. Rescue Plan Act.
To date, the government has sent more than 156 million payments for a total of about $ 372 billion.
“As with the previous two stimulus rounds, monthly bills and day-to-day basics are the two most common uses,” said Greg McBride, chief financial analyst at Bankrate.com.
The Bankrate.com survey also found that the cash infusion probably wouldn’t last long.
About 61% of respondents said 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%, who said it would not help them at all to maintain their financial well-being.
The online survey was conducted between March 24 and 26 and included 2,626 adults.
Separate survey data from the U.S. Census Bureau from March 17 to 29 found that people who had received a stimulus over the past seven days used it primarily to repay debt.
The results could point to changing financial behavior, just as the financial crisis motivated Americans to be more conservative with their money.
“Nothing like a recession really underscores the importance of emergency savings and reducing the debt burden,” McBride said.
That’s how another Bankrate.com poll found that less than 4 in ten Americans have enough savings to cover an unexpected $ 1,000 expense.
“The first business order for most households is that they need to increase emergency savings,” McBride said.
“If this stimulus payment does, in the long run the economy will perform better if Americans have more savings and less debt,” he said.