showed Rodsawang | Moment | Getty Images
As new $ 1,400 Covid incentive checks are introduced, Americans are using them to pay monthly bills, regardless of their income, according to a new survey.
Bankrate.com found that 45% of Americans intend to use the last round of checks for monthly expenses, followed by 36% who intend to use the money for daily essentials, 32% who want to pay off debts and 28% who intend to to add to their savings. (Respondents were allowed to choose multiple uses.)
In particular, only 13% of survey respondents said they would pay $ 1,400 for discretionary or non-essential activities.
Payments of up to $ 1,400 per person, plus $ 1,400 per dependent, were approved by Congress in March under the US Rescue Plan Act.
To date, the government has sent more than 156 million payments totaling about $ 372 billion.
“As with the previous two rounds of incentives, monthly bills and daily essentials are the two most common uses,” said Greg McBride, chief financial analyst at Bankrate.com.
The Bankrate.com study also found that the cash infusion is unlikely to last long.
About 61% of respondents said the money could 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 sustain 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 March 29 showed that people who received an incentive payment in the past seven days used it primarily to pay off debt.
The results could indicate a change in financial behavior, just as the financial crisis has led Americans to be more conservative with their money.
“Nothing like a recession really underscores the importance of emergency savings and reducing your debt burden,” McBride said.
In another Bankrate.com poll, it was found that less than 4 in 10 Americans have enough savings to cover an unexpected $ 1,000 expense.
“The first order of business for most households is that they need to increase their emergency savings,” McBride said.
“If this incentive payment does this, in the long run the economy will work better if Americans have more savings and less debt,” he said.