NEW YORK, Sept. 4, 2020 /PRNewswire/ -- In April, eligible Americans received an Economic Impact Payment, better known as a stimulus check, from the federal government to help combat the economic impact of the COVID-19 pandemic. The checks were worth up to $1,200 for individuals or $2,400 per married couple, plus an additional $500 for each child under 17.
Another round of payments could go out before the November elections, but negotiations have stalled in Congress. The general consensus is that those who received a payment the first time around will receive a payment the next time as well. If another round of checks does go out, how should people use the money? First, let's examine how they used the initial round of checks.
In June, more than 85% of respondents to a U.S. Census Bureau survey said they or someone in their household received or expected to receive a stimulus payment.
According to the Census Bureau, the majority of adults in households that got a stimulus check put — or planned to put — most of the money toward a variety of household expenses.
Here are some of the highlights of the survey responses:
- 80% used the money for food
- 78% spent the money on rent/mortgage and/or utilities
- 58% used the money for household supplies and personal care products
- 20% spent the money on clothing
- 10% planned to spend the money on household or recreational goods
- 33% planned to use the money to pay off debt or add to savings
While most people said they'd use their stimulus check for living expenses, a specific demographic had different plans. Adults making between $75,000 and $99,000 a year said they're more likely to add to their savings or put the money toward paying off debt. For people who can still pay their bills comfortably, the stimulus check has presented a unique opportunity to focus more on repaying pesky debts.
Looking ahead to a potential second round of checks, Americans who are in a position to continue paying down their debts should consider doing so. For any debt repayment plan to be successful, it's important for people to formulate a strategy that works for their individual situation. Some common strategies to repay debts include the debt snowball and debt avalanche methods.
Credello — an information source that simplifies hard-to-understand scenarios around managing debt — can help those who are looking ahead to another round of stimulus checks make smarter decisions with their money, especially when it comes to debt relief.