As federal stimulus checks arrive, how are people spending the money?

The cash is a lifeline for many, but means extra savings or donations for others

Many Americans are struggling to pay the rent or the mortgage during the pandemic and resulting economic turmoil.FREDERIC J. BROWN/AFP via Getty Images

For many of us, it’s much-needed rent and grocery money. For others, a chance to pay down debt, or pad thin savings accounts in case things get worse. And for some, it’s money to donate to a local charity, or support a struggling small business.

The coronavirus stimulus checks that landed in the bank accounts of tens of millions of Americans last week mean a lot of different things to different people. Taken together, the $290 billion program — which will deliver $1,200 per adult and $500 per child to the vast majority of working- and middle-class households in the United States — is the largest such direct relief effort this country has ever seen.

And yet, many experts and everyday people agree, it won’t be nearly enough to blunt the effects of the economic collapse brought on by the pandemic.

“It’s not going to do anything for the broad economy,” said Greg McBride, chief financial analyst at the personal finance website Bankrate. “This is money to help people keep their head above water for a while.”

Indeed, 80 percent of people who responded to a recent Bankrate survey said the money would be “somewhat” or “very” important to their financial well-being right now, with half planning to spend it on rent and utilities, and 41 percent using it for food and medicine.

For Lauren Boudreaux, a Northeastern University student who’s back home helping to care for elderly relatives, and whose mother is among the millions of newly unemployed, every bit helps. They’re waiting for unemployment benefits to kick in and taking advantage of senior discount programs, but even her mom’s $1,200 would go a long way.

“It’ll keep our house afloat for a while,” Boudreaux said Thursday. “Not a long while, but it would give us some relief.”

That’s the main idea, said Jonathan Parker, an economist at the Massachusetts Institute of Technology who has studied past stimulus programs. But this time is different, he said.

When the government gave most households up to $600 in 2001 (worth about $875 today) and up to $1,200 in 2008, the hope was that Americans would go shopping, pumping out money to prop up a struggling economy. And they did. Parker’s research on the 2008 stimulus found that as much as 90 percent of that $100 billion program was spent within a few months, much of it paying for durable consumer goods like cars and appliances that helped keep factories running and big stores open.

In the current crisis, we’ve shut down the economy on purpose. Malls have closed. Car sales are plunging. And with 22 million people in the United States having filed for unemployment benefits in the last month, basic needs are enormous. These checks aren’t so much a stimulus program, Parker said, as a safety net.

“The purpose now is to make sure people survive,” he said. “We don’t want people going back to work right now.”

Of course, not everyone getting a check is on the brink.

While most so-called safety-net programs target low-income residents or the unemployed, this stimulus is quite broad. Most Americans who reported adjusted gross income of $75,000 or less on their 2018 or 2019 tax returns — or $150,000 for a married couple filing jointly — will receive $1,200 per adult and $500 per child under 17. So will Social Security recipients.

Higher earners, up to $99,000 for an individual and $198,000 for a married couple, will see smaller amounts.

The Treasury expects to issue about 150 million payments in all, covering the vast majority of American households.

That will include a lot of people who haven’t lost their jobs and who may work in industries that are able to weather this crisis. For those, it’s a chance to pay down debt or bolster savings accounts.

Adam Smith, a Kingston resident who’s currently in Saudi Arabia teaching English-language classes, plans to put his $1,200 toward credit card debt and computer programming classes. His job feels stable, and his cost of living is low, Smith said, so he might as well gain flexibility for his future.

“I prefer to invest my money in skills and education at this point,” Smith wrote in an e-mail. “That, or get myself debt-free.”

Others are giving away at least some of the cash. Organizers of “mutual aid societies" that have sprung up in a number of Boston-area communities say they’re launching efforts to help connect people who want to donate their stimulus money with neighbors who need it. Catherine Drennan, a spokeswoman for the Greater Boston Food Bank, said the organization — which has seen demand increase 50 percent in recent weeks — knows of at least two people who have donated their stimulus checks.

And for many, the money is a little insurance against whatever might come next. Emily Foster Day, codirector of the Boston Center for the Arts, had to take a pay cut and lay off staff as the events that provide most of the institution’s revenue disappeared overnight. She’s been working to raise funds to sustain the center and the artists who rely on it, but there’s no way to know when business might come back, or what next year’s budget might look like.

So when Day’s check arrived, it went straight into her savings account.

“It could’ve been a nice little bump for us,” she said. “But I’m pretty concerned about the future.”

That future could include more payments like this. The Trump Administration and Democrats in Congress have both said they’re considering a second wave of direct payments if the crisis drags on. And whenever things start to open back up, McBride said, it may make sense to issue another round to jump-start the economy and help consumers out of hibernation.

“But we’re not there yet,” he said. “Right now, what’s needed is a lifeline."

That’s what it looks like to Dan Caswell. The Saugus resident has been staying home from his job at Lowe’s, because he’s considered high-risk for COVID-19, but he lost most of his income after vacation and sick time ran out. His three kids are home and “they eat all day and every day,” he said in an e-mail. Next month’s rent is just around the corner.

Caswell’s been asking for and receiving, help on mutual-aid websites. The other day, someone drove 25 minutes to drop off cereal and milk for his children. Considering all that, the $2,700 Caswell expects he’ll get will be a big help, at least for a little bit. But given the high cost of living, and raising kids around Boston, he said it won’t last long.

“I think we definitely will need more cash assistance,” he wrote. “This is an unprecedented time.”