About 4 in 10 adults are living on less income than a year ago, with many planning to use the payment to pay off debt.
As the U.S. marks a year since the coronavirus shuttered the economy, households are getting a fresh infusion of financial hope as the IRS begins distributing more than. Yet Americans who continue to struggle financially fear the additional cash may only tide them over for a month or two The IRS will send a total of $422 billion in stimulus checks over the next several weeks, part of President Joe Biden’s signed into law earlier this month. It comes as the American economic recovery diverges between upper-income households that have largely weathered the crisis intact because of their ability to work safely from home and lower-income families that are more likely to still be struggling with joblessness or reduced income in service jobs that require them to work directly with the public. Some middle- and upper-income households that received the checks will likely put the money into savings, investments or splurge on a new item, such as a video console or a bike. But adults who have been buffeted by the pandemic told CBS MoneyWatch they plan to immediately use the money for basic expenses, such as covering the mortgage, car payments and utilities. „This is going to be the lifeline that is the only thing that will save my house,“ said Jamie Pontia,44, who was laid off from her job as a hotel bar manager in Pittsburgh last year, of the stimulus check. „I do appreciate the $1,400 — without it I would be drowning. It’ll just help me keep my head above water for a month.“ She added, „Not everyone is going out and buying TVs.“ Pontia is among the 4 in 10 Americans who are continuing to experience a loss of income compared with pre-pandemic times, according to research from financial services firm TransUnion. While that’s an improvement from a year ago, when almost 6 in 10 adults saw a loss of income, it’s still stubbornly high, said Charlie Wise, head of global research and consulting at TransUnion. Households that have weathered the pandemic in better financial shape should consider a „thirds“ approach toward their $1,400 checks, said Brittney Castro, a certified financial planner for Mint, a budgeting and personal finance app.
