Here's how North Carolina residents spent their stimulus money

Samantha Kummerer Image
Monday, July 27, 2020
Here's how North Carolina residents spent their stimulus money
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Here's how North Carolina residents spent their stimulus money

Stimulus checks in North Carolina were largely used as they were intended.

U.S. Census data from July shows 62 percent of individuals who received checks earlier this year used or planned on using most of the $1,200 on expenses.

The numbers from the U.S. Census' Household Pulse survey show a majority of people used the money to buy food, household supplies and pay utilities. Across the state, less than 10 percent of residents planned on spending the cash on electronics, games, sports equipment or donating to charity.

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"So it looks like this had the intended results," said Dr. Michael Walden, a N.C. State economics professor. "The federal government provided money to people, they largely spent it so it flowed through the economic system and it also helped people stay financially afloat."

Just about 12 percent of people used the check to pay off debt or added to savings, however, unsurprisingly, an individuals' age, education level, income and race impacted how they chose to spend the money.

More than 80 percent of households who earned less than $25,000 reported using the money on expenses. Meanwhile, only 41 percent of household making more than $75,000 said they would use the money on expenses.

"The takeaway from this, the good takeaway is that the people who probably really needed the money, the lower income people, by the fact that they are spending it, shows they really did need it," Walden said.

The percent of individuals using the money on expenses also decreased as a person's education level increased. A person with a bachelor's degree or higher was more likely to put the money towards savings or to pay off debt.

The number of family members in a household also contributed to where the money was spent. Predictably, as the number of people increased so did the likelihood of the check being used solely for expenses. Only 54 percent of one-person households planned on using a majority of the money on expenses compared to 78 percent of household with six people.

Individuals 18-24 years old reported the highest likelihood of putting the check towards debt (27 percent), meanwhile individuals over 55 years old were more likely to use some of the money for their savings account (14 percent).

Spending of the stimulus check also varied across racial lines.

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The data shows 78 percent of black individuals spent the check on expenses while 2 percent put the money towards savings.

Hispanic individuals reported the lowest percent of using money on expenses (48 percent) and white individuals reported the highest likelihood of using the cash for their savings (17 percent).

Walden said it's important to take into account how a person's race intersects with their income, job, and family; factors that might play into how they spend the money.

"If it is showing that one demographic group is spending more than another demographic group, is that due to their demographic characteristics or their income characteristics?" Walden said.

Nearly 1 million or 12 percent of North Carolinians reportedly did not receive or did not expect to receive a stimulus check.

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Walden said without the stimulus check he thinks there would be a lot more people in more severe financial states and the economy would be much less robust.

North Carolina's spending falls in line with what the U.S. Census data found nationwide. Across the county, 63 percent of individuals spent or planned on spending most of the check on expenses.

Walden said he was pleasantly surprised by the data and the numbers would be what the federal government would want to see as it shows the money was used as intended.