As a result of the economic difficulties during the COVID pandemic, many Americans received government stimulus checks. These payments were designed to minimize or avoid financial difficulties.
Recipients of the first two stimulus checks used the majority of funds for daily living expenses with food and utilities as the top items. Those who received the third check had some significant changes in their use of the money. An increased portion was used to pay off debt and for savings, including money set aside for an emergency fund. This trend indicated that many households experienced improved financial stability. However, among lower-income groups the third stimulus check was still needed for monthly bills and day-to-day essentials.
People continue to be in need of a cash cushion. Financial advisors recommend using money from stimulus checks or tax refunds to pay off high-interest debt and for an increased savings account. While many households have are better off than they’ve ever been and improving further, millions of others face ongoing financial hardship.
For additional information on stimulus check use, click here.
- Have students talk to those who received stimulus checks to obtain information how the money was used.
- Have students describe a research system that might be used to determine the spending, saving, investing, and credit use habits of various groups of consumers.
- What are reasons people are unable or unwilling to practice wise money management?
- Describe actions that might be taken to prepare for unexpected financial difficulties.