Recently, researchers checked in with them to ask how they spent the funds.
The answers might surprise you, according to financial journalist Kimberly Lankford writing for US News and World Report.
The bottom line? Researchers concluded that “most people made smart moves that could help their finances over the long term,” says Lankford.
In writing the article, Lankford gave me a call to learn more about how our clients and colleagues made use of their stimulus checks. Here’s the highlights of her research:
Overall, 1/2 of recipients used the stimulus checks to pay down debt.
My own twenty-something daughter is fortunate enough to work for a big employer and has a secure job, so she decided to use her stimulus check to pay down a high-interest rate credit card balance that she’s been carrying. That’s a smart decision that will earn her more than 10% in guaranteed savings.
Another 33% used their stimulus money to build up their emergency savings accounts.
“If you can afford to pay your bills now, using the money to build up your emergency fund can help you avoid financial trouble if your situation changes – which could easily happen with the unstable job market,” observes Lankford.
Only 15% of those contacted planned to spend the money.
Some used the funds to improve their home, cover unexpected child-care bills, or upgrade their job skills.
Best of all, some of the stimulus money went right back into the community to help those in need. We were proud to hear from some clients who donated their payments to a local relief fund for hotel and hospitality workers displaced by the pandemic.
Want to read Kim’s complete article for U.S. News? You can find it here.