Coronavirus stimulus checks: Americans are spending payments in 'two big ways'

According to the Treasury Department, around 159 million Americans have received their stimulus money. But the researchers are just beginning to investigate what people are doing with it.
The first data suggests that there are "two great ways that people spend their checks," Joanna Smith-Ramani, director of the Aspen Institute's financial security program, told Yahoo Finance's On the Move.
The first way is with immediate expenses. Researchers from four business schools recently found that "incentive recipients separate their money remarkably quickly." A May survey found that about half of the people who received a check had already spent most of their money paying bills or buying essentials.
Read More: Coronavirus Stimulus Checks: Why Your Payment Is Less Than Expected
Retailers have noticed that the money is going out the door. "We are seeing positive impacts from the checks," Walmart CEO John Furner told Yahoo Finance in May. Brian Cornell, CEO of Target, has also seen the payments translate into expenses.
The patterns, if persistent, are a change from 2001 and 2008 - the two most recent examples of stimulus checks sent to Americans. During these rounds, the researchers found that many people did not spend the money quickly and that a large part of the possible expenditure was spent on durable goods such as household appliances, furniture or new cars.
This is what the payment checks for economic effects look like. Photo: U.S. Secret Service

"Cash is very important"
On the other hand, more people save the money than many expected. The Bipartisan Policy Center asked voters how they would spend the money, and the most common answer was "save or invest" - closely followed by buying food and paying the main bills.
Smith-Ramani thinks he knows why the savings rate is high.
"People are really concerned about what will come in the future," she said, adding that "cash is of great importance" if there is no guarantee of additional impetus.
Read more: Coronavirus stimulus checks: what this means for your taxes
Researchers have found that the biggest predictor of who saved their money was cash - not income. The groups of people with large downward changes in income - indicating a loss of job - had expenditure on stimulus checks that were "only slightly increased compared to users with unchanged income".
Smith-Ramani noted that for those lucky enough to have a stable income, "this was a small surplus that you didn't expect." But these people don't seem to be using the money to pamper themselves, at least until now.
"They are concerned that they will have to go through this themselves," she said of the ongoing pandemic and the recent increase in cases across the country.
The 2008 economic stimulus packages will be printed on May 8, 2008 at the Kansas City Regional Financial Center in Kansas City, Missouri. REUTERS / Dave Kaup (UNITED STATES)
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Future impulses remain uncertain
According to the law passed in March, individuals received checks of up to $ 1,200 (depending on income level) or $ 2,400 for married couples. Parents of children under the age of 17 received $ 500. The money has been going out in waves since April.
In Washington, the chances of another round of stimulus checks remain slim. The democratically led House of Representatives passed a law in May with additional checks. On Monday, President Trump supported the idea of ​​further controls, but many of his Republican counterparts were skeptical of additional measures.
Smith-Ramani was part of Yahoo Finance's ongoing partnership with the Financing Our Future campaign, a group of organizations working to improve retirement security for Americans. Her group recently hosted a weekly series of events with a number of executives dealing with the impact of COVID-19 on financial security.
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.
Continue reading:
Coronavirus stimulus: So far, $ 3 trillion of pandemic aid has been done
Coronavirus stimulus checks: 12 million Americans risk missing out if they don't submit a form
Coronavirus stimulus checks: what should happen before a second round?
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