Uncle Sam is doling out $1,200 stimulus relief checks to millions of Americans soon. But many say it won’t be enough to cover their bills.
Karen Diehl, a retired teacher living in Summit Hill, Pennsylvania, expects to get a check. But the 56-year-old, who is on social security disability, doesn’t expect $1,200 in relief to cover her bills for very long.
She has spent more money on groceries recently since her son, who recently graduated from college, has remained at home as his job prospects have been put on hold in the wake of the coronavirus pandemic. She has also lost out on $800 in the past few weeks from multiple dog sitting jobs that were canceled due to social distancing measures.
“I count on those dog walking jobs for extra income. You can’t survive on just disability benefits,” Diehl says. “A stimulus check would help cover food and utility expenses, but if the $1,200 check is a one-time thing, that’s not going to be enough for most people.”
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Nearly one-third of U.S. adults who anticipate receiving a stimulus check say the money wouldn’t be enough to sustain their financial well-being for one month, according to a new Bankrate.com report.
Roughly 80% say getting a check would be very important (50%) or somewhat important (30%) to their near-term financial situation, according to the study, which surveyed 1,465 adults, including 994 who anticipate receiving a stimulus check as part of the CARES Act.
Half of them think they would use the payment to help pay monthly bills such as rent, mortgage or utilities. Other common plans include paying for day-to-day essentials like food, medicine or supplies (41%), adding the money to savings (30%), and using it to help pay down debt (25%).
“These payments are deemed to be very important to millions of households, but it’s not something that people expect to sustain them for very long,” says Greg McBride, chief financial analyst at Bankrate.com.
The emergency stimulus checks could be as much as $1,200 per person, $2,400 for married couples filing taxes jointly and $500 per dependent child.
For those already suffering from income disruptions, the payment will be needed for day-to-day essentials and monthly obligations, McBride added.
Of those that anticipate receiving a stimulus payment, just under one-third think the influx of money would help sustain their financial well-being from one month to less than three months.
About 11% think it would maintain them from three months to less than five months and another 11% believe it would help preserve their financial well-being for at least five months. Another 14% are unsure how long they will be able to sustain their financial security.
Padding the emergency savings is a much-needed step for many households. Even before the pandemic forced the economy to a standstill, just 41% of Americans were able to pay for an unplanned expense of $1,000 from savings, McBride says.
A record 10 million Americans sought unemployment benefits in the past two weeks, the Labor Department said, as layoffs accelerated in the wake of the outbreak. Another wave of job losses is likely in the coming weeks, experts warn, as travel restrictions stay in place and businesses remain closed across the country.
Treasury Secretary Steven Mnuchin said Americans who have set up direct deposit with the IRS will receive their payment by the third week of April. For those who don’t, checks will be mailed, which could take longer to arrive.