- Congress is nearing agreement on a new coronavirus relief package, which is reported to include stimulus checks worth $600.
- Details around who will get a stimulus check and when have not been finalized.
- We obtained spending data for average households in America’s biggest cities to find out how long $600 cash payments might last.
- As expected, the payment would last longer for renters — across the US, the average is almost 11 days.
- For the average homeowner in the US, the payment would last between six and seven days.
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It’s been nearly nine months since the US government authorized and began sending stimulus checks to American families.
The checks, coupled with expanded unemployment benefits, were something of a band-aid for the ongoing financial crisis. The salve has long worn off.
Data shows that up to 20 million Americans are estimated to be behind on rent payments. And new US jobless claims totaled an unadjusted 885,000 for the week that ended December 12.
Congress is working around the clock to pass more relief before its holiday break. Lawmakers are negotiating the details of a $900 billion aid package, which is likely to include a second stimulus check.
However, the amount proposed is $600 — half of the maximum check individuals received in the spring. Top Democrats have repeatedly pushed back on handing out stimulus checks worth less than $1,200, but a compromise remains to be seen.
To find out how long a $600 stimulus check could last in the most populous US cities, we obtained data from The Council for Community and Economic Research, Cost of Living Index.
We gathered expected monthly expenditures for two basic consumer profiles: homeowners and renters. Monthly expenditure data takes into account typical spending behavior and the following costs: groceries, housing, utilities, transportation, healthcare, and other miscellaneous spending such as recreation or entertainment.
For each city, we divided total monthly expenditure by 31 to arrive at an average daily expenditure. Lastly, we divided the proposed $600 stimulus check by the average daily expenditure to arrive at an approximate number of days it would cover for each consumer profile.
Because the expenditures are based on a 2.5-person household, we assumed two $600 checks per household.
A few things to keep in mind:
- These are averages. Some people spend far less in a given city, and others spend more. As such, $600 might go further for one person or family than it does for another.
- Some families may get multiple checks. Based on the definition of a household used in the data set, we assumed each household would get two stimulus checks, totaling $1,200. While there may be additional payments approved for dependents, we didn’t include them in our calculations.
- Expenditure data might not reflect spending cutbacks during COVID. Monthly expenditure figures are assumed based on two things: surveys of spending behaviors and the current prices of goods and services. If households made cutbacks to accommodate their reduced income during the pandemic, it may not be reflected.
The national average monthly spend for a two-person household that owns their home is $5,535, so two $600 stimulus checks (one for each person) would last 6.72 days.
The national average monthly spend for a two-person household that rents their home is $3,397, so two $600 stimulus checks (one for each person) would last 10.96 days.
There’s still debate over the structure and final amount of the second round of direct cash payments, Business Insider’s Joseph Zeballos-Roig reported. Specifically, there’s been discussion about targeting them to lower income levels this time around to benefit “those who need it most,” Sen. John Thune of South Dakota told reporters on Capitol Hill.
According to data from the Federal Reserve Bank of New York, most people who received the first stimulus check stashed the money in savings or used it to pay off debt. Less than one-third of US households used the cash for essential and non-essential purchases.
Those checks were worth up to $1,200 and went to Americans whose adjusted gross income (AGI) was under $99,000. Married couples with an AGI below $198,000 received up to $2,400. Parents with dependents younger than 17 got an extra $500 per child.
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