Question of the Day: The federal government mailed out $1,200 stimulus checks this spring. Rank order from highest to lowest how people used the stimulus: Purchased stuff, paid down debt or saved it?


Answer: Purchased stuff

Using data from a recent survey of 12,000 Americans conducted by Nielsen, a market-research firm, the authors found that just 42% of the money was spent. Another 27% was saved. The remaining 31% was used to repay debts.

https://www.economist.com/graphic-detail/2020/09/02/how-did-americans-use-their-coronavirus-stimulus-cheques

Questions:

  • What do you notice about the relationship between household income and spending. on food, health, beauty and household items? 
  • What do you think people saved such a high percentage of their stimulus checks? 
  • Which expenses in the chart above would you consider needs vs. wants? 

 Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (the Economist): 

But a new working paper by three economists—Olivier Coibion, Yuriy Gorodnichenko and Michael Weber—suggests that Americans did not use the payments quite as Uncle Sam had hoped. Using data from a recent survey of 12,000 Americans conducted by Nielsen, a market-research firm, the authors found that just 42% of the money was spent. Another 27% was saved. The remaining 31% was used to repay debts.

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Looking for an engaging budgeting activity? NGPF’s Virtual Version of the Bean Game is a teacher hit! 

 

About the Author

Tim Ranzetta


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.



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