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How are stimulus checks being spent? Two-thirds of recipients say they use them for groceries, monthly bills

“For all the talk of revenge spending and pent-up demand for travel... just 13 percent of stimulus check recipients plan to spend the money on discretionary activities or nonessential items," said one analyst.
People shop for groceries at Costco in New York on Nov. 24, 2020.
People shop for groceries at Costco in New York on Nov. 24, 2020.Noam Galai / Getty Images file

Approximately 159 million economic impact payments, totaling more than $376 billion, have gone out to eligible recipients in the last month — and the majority of that money continues to be spent on groceries, rent and other monthly bills, according to a new survey released Wednesday.

The number of recipients looking to put their stimulus checks towards their near-term financial situation remains elevated at 67 percent, according to analysis from Even those among the highest earning households, making $80,000 or more annually, are continuing to feel the brunt of the pandemic, with nearly half saying they will spend their check in this way.

“For all the talk of revenge spending and pent-up demand for travel, you wouldn’t know it by seeing just 13 percent of stimulus check recipients indicating that any of the money would be spent on discretionary activities or nonessential items," said Greg McBride, chief financial analyst at Bankrate.

“More than 40 percent of households are earning less now than they were prior to the pandemic,” McBride said. “And while that's highest among lower income households, higher income households have not been immune from that.”

Although some financial freedom has opened up in nonessential spending (13 percent), paying down debt (32 percent) and investing (11 percent) since January, the number one reason for stimulus spending among all income brackets is monthly bills (45 percent).

“More than half of the jobs lost last year have been recovered,” McBride said. “But there are still nearly 9 million jobs that disappeared that haven't yet come back. There are 18 million Americans still drawing some form of unemployment compensation.”

More than 6 in 10 Americans believe the $1,400 won’t last them longer than three months, while 34 percent say the extra funds won’t even last them one month, the Bankrate survey found.

Current stimulus spending habits are relatively similar across age groups, according to the survey, with half or more of older millennials, Gen Xers and Gen Zers using the money to pay monthly bills and 40 percent of Gen Xers, 37 percent of older millennials and 36 percent of younger baby boomers using some portion of it to pay down debt.

There is a greater disparity among genders.

Women, who have been disproportionately affected by the pandemic, are more likely than men to use the latest economic impact payment to pay monthly bills (49 percent versus 41 percent) or for day-to-day essentials (40 percent versus 32 percent), while men are more likely to pay down debt (37 percent versus 29 percent) or invest (15 percent versus 7 percent).

While the economy added a robust 916,000 jobs last month, just one-third of those went to women, who have lost over 4.6 million jobs since February 2020, according to the National Women’s Law Center. Over that timeframe, many have had to pick up a job that frequently does not come with a paycheck: caregiving.

“Whether it's relatives that are ill or elderly or kids at home, those burdens do tend to fall more on women than on men, and you see that reflected in how people intend to use their stimulus payments,” McBride said.

There may be hope on the horizon for the millions who continue to struggle financially: Almost two dozen senators have urged the Biden administration to include recurring relief payments and automatic unemployment insurance extensions in the “Build Back Better” plan.

“While we are pleased that the American Rescue Plan included a one-time direct payment and an extension of federal unemployment insurance programs, a single direct payment will not last long for most families, and we are worried about the cliff facing unemployed workers when the unemployment insurance extensions expire on Sept. 6,” the senators wrote in a letter last month.

“This crisis is far from over, and families deserve certainty that they can put food on the table and keep a roof over their heads,” they wrote.