Question of the Day: Rank order (from highest to lowest) how consumers plan to use stimulus payments received in March 2021: Spent it, Paid down debt, Saved It?
- Consumers received three stimulus payments over the past year. How much of a difference is there in how they used the payments?
- Consumers saved a significant amount of all three stimulus payments. What do you think they are saving for?
- What would you do if you received $1,400 now?
Behind the numbers (NY Fed survey):
Similar to the second round of stimulus, household heads without a college degree plan to use more of the stimulus for paying down debt and less for consumption. Those without a college degree expect allocating 37 percent toward debt while those with a college degree planned to use 27 percent for that purpose. Comparing respondents with household incomes below $40,000, between $40,000 and $75,000, and above $75,000, we find a monotonically decreasing share used toward paying down debt, and higher-income households, on average, tending to save more.
Lots more questions where this one came from... browse the Question of the Day library.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
To get access to NGPF answer keys, assessments, and teacher-only resources: create a FREE Teacher Account