Stimulus Update: 3 Most Common Ways People Used Their Stimulus Checks

Before the Coronavirus Aid, Relief and Economic Security (CARES) Act went into effect in early 2020, many were debating what large stimulus checks would do to the economy, and how Americans would spend the money. Now that the era has come and gone, the National Bureau of Economic Statistics has analyzed exactly where all that money went.

Overall, the study concluded that spending patterns were similar to those seen in 2001 and 2008, when other stimulus payments were sent out. However, in 2020, payments were larger, and recipients were somewhat less likely to spend them in the past. According to NBER data, here’s how the coronavirus stimulus payments were spent by recipients in 2020 and beyond.

Debt Payments

Perhaps refreshingly, debt payments were the single most popular use of stimulus checks, amounting to 31% of the money spent. According to data from the Federal Reserve, credit card balances fell from about $625 billion in Jan. 2020 to just $500 billion by April 2021.

Overall household debt dropped by $34 billion in the second quarter of 2020, marking the first decline since 2014. Credit card debt in particular fared even better, marking the steepest decline in that type of debt since records have been kept.

Savings and Investments

About 27% of stimulus payments were set aside for savings and investments. This means that nearly 60% of relief money was either saved or used to pay down debt.

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About 40% of recipients spent their stimulus money, rather than saving it or using it to pay off debt. NBER data further subdivided spending into broad categories. Overall 42% of stimulus payments were used for general spending. Here’s a more comprehensive breakdown:

Food, Health and Beauty Aids, and Household Products

About 16% of all stimulus payments were used for basic household items that are needed on a daily basis. This was the single largest individual component of the spending category.

Durable Goods

Durable goods are items that don’t wear out quickly and have value for an extended period of time, such as automobiles, appliances, furniture, jewelry and countless other items. Overall, about 7% of all stimulus money was spent on durable goods.


About 6% of stimulus money was used for healthcare expenses.

Other Consumer Spending

“Other” was the second-largest consumer spending category, encompassing all purchases not falling into one of the other three categories.

Breakdown by Demographics

Although the aggregate statistics are informative, there was also a significant variation in spending patterns among varying demographic categories. Larger households, for example, tended to spend the money, while seniors tended to pay down debt.

More educated households, along with the younger population, were more likely to save their stimulus money, while those who were not working were more likely to spend it.


The NBER drew a few conclusions from how American consumers used their stimulus payments.

Firstly, according to the NBER, there seems to be a limit on how much economic stimulus can be derived from direct payments to consumers. While many households made good individual financial decisions that likely increased their household net worth — by paying down debt and saving or investing their stimulus — by not spending the money, they didn’t provide economic stimulus to the overall economy, as was theoretically the intent of the payments.

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However, perhaps one of the most surprising results of the study was that two-thirds of those who received a payment indicated it had no bearing on their job-search decisions, while more than 20% responded that they actually looked harder for a job after getting their stimulus money.

This finding seems to fly in the face of the conventional wisdom that stimulus payments encouraged recipients to drop out of the labor force.

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