Home Credit score What an influx of extra money looks like for many

What an influx of extra money looks like for many


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What happens when you get a break from one paycheck to the next?

Key points

  • Around 472 million stimulus payments were issued in 2020 and 2021, and for some they were life changing.
  • Stimulus payments have allowed many to pay down debt and build an emergency fund.

In June, CNBC investigated the 2020 and 2021 stimulus payments from an interesting angle. The news agency wanted to know if the payments changed the way Americans think about money. Considering the millions of households that have received payments, it’s impossible to believe everyone feels the same way. Still, it’s worth digging deeper and noting how some recipients have been impacted.


CNBC spoke with a mother of three from Florida named Denise. Denise co-directs a nonprofit called Central Florida Jobs With Justice, and between three rounds of economic impact payments, has received more than $10,000 in stimulus funds.

According to Denise, she used the money to pay off her car loan and a credit card. She built up an emergency fund, which she had never been able to do before. As her debt has been reduced, Denise’s credit rating has improved.

And this emergency fund? It helped the family get by when their partner lost his job earlier this year. Despite what she’s been through, Denise says she feels more financially stable today than she has at any other time in her adult life.

A wake-up call?

What is most interesting about Denise’s experience is how she changed her view of money. She took control by automating bill payments and putting more effort into managing her finances. Having stimulus money to spend has given her a glimpse of what’s possible and, judging by the CNBC report, inspired her to take an active role in her financial well-being.

Salaam and Hina

Salaam and Hina are a married couple raising two young children in Virginia. Like many Americans, the couple sometimes feels like they can’t move forward financially. With stimulus money in their bank account, the couple was able to reduce credit card debt, pay for groceries and buy diapers for the baby.

Although they are both professionals — Salaam was a public benefits lawyer (now deputy director) and Hina teaches online college classes — the couple say they lived paycheck to paycheck. Before receiving stimulus funds, they would “rearrange their debts” to stay on top of their bills. Debt shuffling occurs when someone takes advantage of a 0% credit card offer and transfers existing credit card debt to that card. The debt is still theirs, but now they won’t have high interest rates hanging over their heads until the promotional period expires.

Salaam describes the costs associated with a new baby as “draining water from a leaky boat”. And that’s where the enhanced child tax credit has helped.

Despite having great careers and “doing everything right,” the couple’s finances were a cautious balance before the stimulus payments. While they may find themselves back where they were now that the stimulus is over, they now know what it’s like to have enough to cover the basics and focus on paying down debt.


Nestor, a California resident, stressed by debt. In total, he received about $4,000 in federal and state stimulus payments. Nestor told CNBC he used half to catch up on loans, 10% to set up a savings account and the rest to pay for basics like car insurance and his cell phone bill.

Most important, perhaps, is what Nestor says the experience has taught him. According to the new graduate, the experience puts into perspective how much money he makes each month and how much he has to spend. He learned that every dollar really counts when it comes to personal finance.

An estimated 472 million stimulus payments have been issued in 2020 and 2021. For some, these payments have shown what is possible and how good it is to have bills paid and a financial safety net in place.

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