Stimulus Check News: How Are Recipients Using Their $1,400 Payment?

While Wall Street and Capitol Hill are celebrating a rebounding economy and a theoretically looming end to the COVID-19 pandemic, there are signs that the recent rollout of $1,400 stimulus payments might not do much for ordinary Americans. Polling data from Bankrate shows that 61% of respondents will be back in financial trouble within three months, with the third stimulus check serving as a vital crutch during that period.

Specifically, that 26% agreed with the statement that the checks would tide them over for between one and three months. Slightly smaller groups said it would be even less effective: 21% said it wouldn’t last a month, 14% said it wasn’t helping at all.

An even higher share of respondents said that the third round of checks was an important element to their near-term finances, 80%.

The most common use for the money is on bills, day-to-day essentials, debts and savings.

Only 13% of respondents planned to use it on non-essential purchases, a potentially concerning metric for businesses counting on a surge in consumer spending. Some experts, however, say it can be a boon in the long term.

“Stimulus continues to be a bit of a misnomer, with households predominantly using the money to pay monthly bills and provide day-to-day essentials,” says Greg McBride, Bankrate’s chief financial analyst. “Even households with those bases covered are opting to pay down debt and boost savings – prudent decisions that lead to more sustained spending in the future.”

That’s a mixed bag for Bankrate, which suggested in March that recipient priorities should include both essentials and investment for the future.

The most vulnerable demographics regard stimulus checks as the most important. While middle- and upper-class jobs have largely recovered, America’s working class is still seeing a deficit.

Rates of respondents rating the checks as not very important or not important at all have risen slightly since the first and second checks.

John Leer, an economist for Morning Consult, says that might not be a good sign. For some, flat payments simply aren’t going to make much of a difference. Job growth is what’s needed for sustained stability.

“We have to be real with ourselves that ultimately, the strength of the consumer depends on the strength of employment over long enough periods of time,” Leer said.