While the U.S Congress debates and works toward passing another stimulus package which will likely include a third, $1400 stimulus payment, data is beginning to be released that paints a clearer picture of how the second, $600 stimulus payment from December's stimulus bill is being spent. Although the original hope with stimulus checks was that people would spend them on goods and services to help the economy recover, data shows that most people actually needed to use their stimulus money on essentials, especially as unemployment remains stubbornly high. A new survey from Apartment Guide examined how 1,000 renters all over the country spent their checks: here’s what you should know about the findings.
Rent and Utilities Were the Most Common Uses of Stimulus Money
The survey found that just over 38% of respondents spent their stimulus money on either rent or utilities. Although there is a federal moratorium on evictions in the US, the moratorium doesn’t forgive rent—it just makes it illegal to evict. So while you can’t lose your home during the pandemic due to inability to pay, you could end up owing months of back rent later. Many people chose to spend their stimulus checks on rent rather than face debt.
For most people, $600 isn’t enough to cover full monthly rent and utilities, however. The average monthly cost for an apartment in the United States is nearly $1500. If you need some extra help paying your rent right now, check out our post on rental assistance programs by state.
Some People Didn’t Spend Their Stimulus Check At All
After rent and utilities, the most common thing people did with their stimulus checks was save them—about 15% of respondents put their checks directly into savings.
While people saving their checks doesn’t help the economy much, it’s understandable when many people are facing lost income that they will save for “a rainy day.” Some respondents chose to use their stimulus check to create, or grow, an emergency fund for unexpected expenses.
Only A Few People Spent Their Checks on Goods and Services
12% of respondents used their payments for groceries, but beyond that, few people used them toward consumable goods or services. Only 2% of respondents used their check toward retail items, and 1.7% used them toward entertainment. These trends reflect general consumer spending habits during recessions; retail goods, travel, and entertainment are generally the first industries to be hit during a recession, even without a public health crisis.
It’s possible that once the next stimulus package is passed and $1400 checks are distributed, the spending pattern will change, since people will be receiving more funds and might have more ability to buy more “fun” things.
We will keep you updated on the latest news on the third stimulus check. In the meantime, we are curious how you spent your second check. Did you use it towards expenses, retail items, or something else entirely? Tag us on Instagram at @helloskip to let us know, and we’ll share your responses in our stories! You can also track the distribution progress of the second stimulus check with our free tracker, available on the Skip app here.