PRNewswire -- A survey of 3,004 persons across the United States who receive financial counseling from a national nonprofit agency found that 29.4% used funds from their tax stimulus check to pay for everyday expenses, such as food and gasoline, while 20% said they paid down their credit card debt.
In addition, almost 5% of those surveyed said they utilized the funds to help them prevent foreclosure of their home or avoid bankruptcy. An additional 7.5% said the funds "give some more time to organize their finances and possibly avoid" these two scenarios.
In response to the question, "If you are facing foreclosure, will this check help you avoid foreclosure?" 3.5% responded "yes." An additional 5.1% of those surveyed, said the stimulus payment "gives some more time to organize finances and possibly avoid foreclosure."
Approximately 1.4% surveyed, said the funds would help them avoid bankruptcy, while 2.4% said the funds will allow them more time to organize their finances and possibly avoid bankruptcy.
The survey was conducted in late June by Consumer Credit Counseling Service (CCCS) of Greater Atlanta, a national nonprofit agency that provides credit counseling, as well as counseling to prevent foreclosure and avoid bankruptcy, to people in all 50 states. Of the 3,004 responding to the survey, 2,147 had received their check from the federal government.
"Many Americans are using the federal stimulus checks to help them get by and pay for everyday expenses," said Suzanne Boas, president of CCCS of Greater Atlanta. "The extra money is providing them breathing room with their creditors, including those who want to avoid foreclosure and keep their homes."
Approximately $106.7 billion in stimulus payments will be made this year to 130 million households. The payments began on April 28 and are scheduled to be completed by mid-July.
Rather than spend funds on new purchases, the survey also shows that some Americans are using the stimulus checks to make additional payments on their mortgage, car or other loans, and others are using the funds for home repairs. For example:
-- 7.8% said they would use the funds to make an additional payment on their mortgage;
-- 9% said they would make an additional payment on another debt, such as a car payment or a student loan;
-- Approximately 5.6% of respondents said the funds will be used to make home repairs;
-- 2.5% said they would use the funds to pre-pay their property or income taxes for 2008.
Other survey findings include:
-- Approximately 82% of the people surveyed said they plan to save 20% or less of the tax stimulus funds they receive.
Asked to rate the state of their current financial situation on a scale of 1 to 10, with 1 being the "most stressful," about 33.6% of respondents rated their situation a "1."