Stimulus checks rewired how some Americans see money

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For Denise Diaz, the benefits of pandemic-era stimulus checks went beyond everyday dollars and cents. How they think they rewired money.

Diaz, a mother of three who lives outside Orlando, Florida, received more than $ 10,000 from three rounds of “economic impact payments.”

They were among the 472 million payments issued by the federal government, totaling about $ 803 billion. The effort amounts to an unprecedented experiment to prop up households like the Covid-19 cratedred US economy.

The checks (and other federal funds) are the epicenter of a debate about whether and how much financial aid has helped fuel inflation, which has been running its hottest for about 40 years.

But they are undoubtedly listed as a lifeline to the Great Depression from the worst unemployment spell in many people. Recipients are reached by CNBC using the money in various ways – to cover household staples, make debt payments and create rainy-day funds, for example.

Diaz, who co-directs a local nonprofit, Central Florida Jobs with Justice, used the funds to pay off a credit card and a car loan. Her credit score improved. Diaz’s partner lost her job earlier this year when she built an emergency fund – previously nonexistent.

Consequently, Diaz, 41, feels more financially stable than any other period of her adulthood.

The financial buffer and associated peace of mind also changed her psychology. The first time for She automated bill payments (utilities, a second family car and credit cards, for example).

“We weren’t doing that [before]”Diaz said.” Because you never knew what could happen [financially]so I never trusted it. “

These days, Diaz thinks more about budgeting. Homeownership seems to be within the years of renting.

“The stimulus changed how I think about what’s possible, personal spending habits and the way I manage my money,” she said.

‘Tough to make a dent’

The stimulus checks were the result of legislation – the CARES Act, the Consolidated Appropriations Act and the American Rescue Plan Act – passed by Congress in 2020 and 2021 from the fallout of Covid-19.

Homes received payments of up to $ 1,200, $ 600 and $ 1,400 per person, respectively. Qualifications such as income limits and payment terms depend on those three funding tranches.

Census Bureau survey data shows most households use the funds for food and household products, and make utility, rent, vehicle, mortgage and other debt payments. To a lesser extent, households use them for clothing, savings and investments and recreational goods.

Salaam Bhatti and Hina Latif, a married couple living in Richmond, Virginia, used a chunk of their funds to reduce their credit card debt, which has been proven difficult in recent years, especially after having children. (They have a 3-year-old and a 3-month-old.)

Bhatti and Latif paid off several thousand dollars in debt during the pandemic and have about $ 30,000 left, they said.

“It’s been tough to make a dent,” Bhatti, 36, said. “Sometimes it just feels like you’re not making any progress.”

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The couple had a gross income of about $ 75,000 during the pandemic. Bhatti was a public benefits attorney at the Virginia Poverty Law Center, and Latif teaches online at the College of DuPage in Illinois.

Prior to getting the stimulus payments, the duo used a “debt shuffle” approach to stay afloat, Bhatti said. That added benefit of multiple balance-transfer offers is zero interest, he said.

They also use stimulus funds to help cover household expenses such as groceries and other items such as diapers.

The stimulus changed how I think about what’s possible, personal spending habits and the way I manage my money.

Denise Diaz

stimulus check recipient in florida

Bhatti and Latif, like Diaz, also received monthly payments of an enhanced child tax credit – up to $ 250 or $ 300 per child, depending on age – that lasted six months starting in July 2021.

“With costs increased our new baby so often feels like we’re in a hole with a boat out of scooping water,” Bhatti said. “We are not living extravagantly by any means, but because of the bulk of our income [is] Going to the debt, we are pretty much living paycheck to paycheck. “

‘Every dollar really matters’

Nestor Moto Jr., 27, used his stimulus payments to chip away at student loans. The Long Beach, California, resident received about $ 4,000 in federal and state-issued payments.

He used about half the loans and 10% for savings. The remainder helped Moto, an accounting firm for an office manager, pay bills (phone and car insurance, for example) when his employer reduced his full-time schedule to about 10 hours a week earlier in the pandemic.

“They really helped me catch up on my student loans,” said Moto, who graduated from California State University with a bachelor’s degree in political science. He still owes about $ 10,000 of an $ 18,000 initial balance.

Moto wanted to reduce his debt even though the federal government paid for the last two-plus years of paused payments and interest. He’s not expecting the Biden administration to wipe out his outstanding debt.

Sometimes it just feels like you’re not making any progress.

Salaam Bhatti

stimulus check recipient in Virginia

“I saved money,” Moto added. “[The stimulus] How Much Money I Make A Month and Week and How Much I Spend

“It showed me how much every dollar really matters.”

While grateful for financial support, Bhatti feels financial freedom with a brush to get after a slight letdown. The US economy has rebounded from early 2021, when lawmakers passed the last broad pandemic aid package for individuals; Some households look for ongoing financial pressures.

“It’s such a tease,” Bhatti said of the stimulus payments. “It felt like dangling a carrot in front of you, the government saying, ‘We know we can help you.’ And then eventually not to go. “

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