How Far Do the Stimulus Checks Really Go?

Depending on the size of your household, the impact varies widely

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided much-needed economic assistance to tens of millions of Americans who lost their jobs or sources of income, or who were in some way impacted by the economic recession brought on by the pandemic. 

While everyone’s economic needs are different, we wanted look at how much the stimulus actually covered the average American’s expenses. How far stimulus checks go in helping Americans with their monthly expenses varies depending on the size of the household and their cost of housing.

Key Takeaways

  • The stimulus checks sent out in 2020 covered 38% of individuals’ monthly spending on average.
  • Households with up to four people benefited the most.
  • Housing costs are the highest expense across the board—especially for single-person households.
  • Additional stimulus checks are on the way.

Average Monthly Spending vs. Stimulus Payment

While there is no “average American,” the U.S. Department of Labor (DOL) collects data on “consumer units,” which allows us to view average yearly expenditures for singles, couples, and families. We can also see the average breakdown of a consumer’s monthly spending across categories. A consumer unit can be composed of an individual, or various members of a household—whether or not they’re related—who use their income to make joint spending decisions. 

By overlaying the estimated stimulus check amount (for the first round of payments sent out in 2020) with the DOL’s expense estimates, we found that the checks covered less of individuals’ monthly expenses compared to those of families. According to the Bureau of Labor Statistics’ 2019 Consumer Expenditure Surveys report, published in September 2020:

  • One “consumer unit,” a household with one person, spends $38,266 a year or $3,188 per month, on average.
  • A two-person household spends $66,861 a year, or $5,571.75 a month.
  • A three-person household spends $74,134 a year, or $6,177.83 a month.
  • A four-person household spends $85,139 a year, or $7,094.91 each month. 
  • A single parent with at least one child under the age of 18 (the average is two) spends $48,615 per year, or $4,051.25 a month.

So, what did the first round of stimulus checks mean to each of these households? Stimulus check amounts were determined by either 2018 or 2019 tax information. Single earners with up to $75,000 of adjusted gross income (AGI) per year received $1,200. Those filing jointly and earning up to $150,000 received $2,400. Additionally, for each dependent under age 17, individuals or families received $500 per child. There also were reduced stimulus check amounts for Americans earning more than $75,000 who are subject to certain qualifications.

160 million

The number of Americans who received a stimulus payment in the first round sent out in 2020, which adds up to $270 billion, according to the Internal Revenue Service (IRS).

For qualifying individuals, the stimulus covered 38% of their monthly spending on average. For qualifying couples with one child, it covered 47% of their monthly expenses, and for those with two children, 48%, on average. For single parents with two children, the stimulus covered just over half (54%) of monthly expenses.

Average Monthly Spending Versus Stimulus Check
Household Monthly Spending Stimulus Amount % of Monthly Spending Covered
Single Adult $3,188.83 $1,200 38%
2 Adults $5,571.75 $2,400 43%  
2 Adults, 1 Child $6,177.83 $2,900 47%
2 Adults, 2 Children $7,094.91 $3,400 48%
1 Adult, 2 Children $4,051.25 $2,200 54%
Averages of total annual expenditure by consumer unit. Source: Bureau of Labor Statistics, 2019 Consumer Expenditure Surveys report

Housing Costs Remain the Highest Expense

For everyone, but especially for single consumer units, their biggest expenditure by far is housing. Housing accounts for 32.8% of expenditures on average, across the board. The second highest expenditure is transportation (17%), followed by food (13%).

Here is a breakdown of how much is spent on housing by households of different sizes.

Annual Housing Expenditure
Household Total Annual Expenditure Housing Expenditure % of Annual Expenditure
1 Person $38,266 $14,622  38%
2 People $66,861 $21,338  32%
3 People $74,134 $23,486 32%
4 People $85,139  $26,281 31%
Source: Bureau of Labor Statistics, 2019 Consumer Expenditure Surveys report

As layoffs continue or people have their hours and incomes reduced, and millions remain unemployed, personal budgets are stretched for many, causing some Americans to miss their monthly rent or mortgage payments. Programs for homeowners that prevent foreclosure and eviction or provide mortgage payment relief are available from the federal government, states, municipalities, and private lenders. Many programs also offer help for renters.

In addition, President Joe Biden has signed a number of executive orders, including one that extended a moratorium on foreclosures and evictions until at least March 31, 2021. That was followed by a new Biden order extending the moratorium until June 30, 2021.

Additional Stimulus Payments

The Consolidated Appropriations Act of 2021, signed by then-President Donald Trump in late December 2020, provides a second payment of $600 to adults and $600 to each dependent 16 and younger, who meet the same income requirements (based on 2019’s AGI) as the first round of stimulus checks.

In January 2021, President Biden introduced a $1.9 trillion COVID-19 stimulus package called the American Rescue Plan. The plan includes $1,400 stimulus payments to people making less than $75,000 annually, to supplement the $600 checks going out now. If approved as it stands, the $2,000 in total of additional payments still fall short of the monthly expenditures of the average American.

The stimulus checks are not meant to replace income for those who have been laid off or experienced income reductions, but rather to help people pay part of their monthly expenses without falling deeper into debt. Other sources of support—including unemployment insurance, and loans for small businesses or independent contractors established by the CARES Act—also were made available to ease the loss of income.

Many Americans Saw Checks Delayed by Banking Hurdles

The rollout of the stimulus checks was experienced differently by those who have a direct deposit account on file with the IRS versus those who don’t. Those who don’t received their check by mail later than the direct deposit group. 

Unfortunately, approximately 6.5% of U.S. households are unbanked, according to the Federal Deposit Insurance Corporation (FDIC), meaning that no one in the household has a checking or savings account, preventing them from receiving direct deposits. That’s 14.1 million adults who had to wait for a paper check to arrive in the mail.

If you are eligible and did not receive any stimulus payments, then you can claim a refundable tax credit by filing a 2020 tax return. That also applies to those who earned less in 2020 than in 2019 and might have qualified for a larger check than they received.

Only 2.2% of unbanked households make more than $75,000 per year, meaning nearly all Americans without a bank account are eligible for a stimulus check but were forced to wait for paper mailings.

What is clear is that even when the economic declines abate, it will take months, if not years, for the unemployment rate to fall and for millions to resume earning the incomes that they lost during the pandemic.

Article Sources
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  1. U.S. Bureau of Labor Statistics. “Consumer Expenditures Report 2019.”

  2. Internal Revenue Service. “Economic Impact Payment Information Center.”

  3. U.S. Department of Housing and Urban Development. “Biden Administration Authorizes Extension of Federal Housing Administration Single Family Foreclosure and Eviction Moratorium.”

  4. The White House. “Fact Sheet: Biden Administration Announces Extension of COVID-19 Forbearance and Foreclosure Protections for Homeowners.”

  5. U.S. Congress. “H.R.133 — Consolidated Appropriations Act, 2021.”

  6. The White House. “Fact Sheet: President Biden’s New Executive Actions Deliver Economic Relief for American Families and Businesses Amid the COVID-19 Crises.”

  7. Federal Deposit Insurance Corporation. “FDIC National Survey of Unbanked and Underbanked Households.”

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