And while 61% of black respondents intended to the money on paying debts, only 45% of white respondents did.
The main purpose of the stimulus check is to add money to the system that has made the economy sluggish. If people keep them in their banks then there’s no use of this stimulus.
Therefore, the government has gathered the data on their usage and the reports from early in the pandemic were encouraging.
As per LendingTree, based on U.S. Census Bureau data around the usage of the most recent stimulus check, suggests that Americans’ priorities have changed. Per its most recent estimates, only one-fifth of Americans spent the March 2021 stimulus check on necessities; fully half used it instead to pay down existing debts, an increase of 34% from 2020.
Is this good or bad?
LendingTree suggests that the changing pattern reflects optimism. The rush to buy badly needed immediate goods – stocks of food, for instance, or toilet paper – may have been a reaction to fear, as Americans were unsure of the future and prioritized their necessities over long-term strategic purchases. A year into the pandemic, most Americans have become accustomed to it, and less likely to make emergency purchases.
Matt Schulz, LendingTree’s chief credit analyst, noted that payment of debts was usually not prioritized during economic downturns, due to the pressing need for other considerations. However, LendingTree encouraged the pattern. Schulz was quoted as saying, “Repeated stimulus and reduced spending means people have more cash in their pockets, and that — combined with the hope spurred by widespread vaccinations — has given them the luxury of paying down debts instead of solely squirreling away cash.” He struck a note of optimism: “Many, many Americans have been financially devastated and may never quite recover, but a surprising number of Americans will emerge from the pandemic in the far better financial shape than most anyone would’ve predicted.”