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The stimulus checks are here. How are people spending them?

Multiple reports are out about what people are spending their money on. But should they be doing it?

The Biden administration will begin sending out child cash benefits by July 15.
In this April 23, 2020, file photo, President Donald Trump’s name is seen on a stimulus check issued by the IRS to help combat the adverse economic effects of the COVID-19 outbreak, in San Antonio. The House of Representatives passed a $1.9 trillion package that includes a $1,400 stimulus check.
Eric Gay, Associated Press

Millions of Americans across the country started getting their coronavirus stimulus checks over the last few weeks — and they’re now starting to spend them. But are they spending on the wrong things?

What’s going on?

The New York Times reports that many young Americans have decided to use their stimulus checks to invest in the stock market.

  • For example, Abraham Sanchez told The New York Times he used part of his check to invest in AMC Entertainment since he didn’t necessarily need the check to stay financially secure.
  • Patrick Fruzzetti, the managing director and partner at Hightower Advisors, an investment firm, told The New York Times that people are putting their checks into the stock market, which might include more speculation and trading.

In fact, a survey from Deutsche Bank found close to half of its respondents — who were between 25 and 34 years old — plan to invest close to 50% of their stimulus checks into the stock market, according to CNBC.

  • The survey said “a large amount of the upcoming U.S. stimulus checks will probably find their way into equities,” CNBC reports.
  • However, Deutsche Bank said the majority of Americans won’t likely follow this trend since they don’t have trading accounts, per CNBC. Those surveyed did have trading accounts so the numbers likely skew higher.

Is this a good idea?

MarketWatch recently put together a list of things you shouldn’t buy with your stimulus check, and one of those items includes “meme-stocks.” This is a reference to when Redditors banded together to invest in stocks like GameStop and AMC — two companies trending downward.

  • MarketWatch recommends not paying for a new or used car payment, summer vacation spring clothes, the new iPhone or outdoor furniture.

So what should you buy?

According to Forbes, it might be the perfect time to “invest in something off your wishlist, like a new washer or dryer to upgrade your laundry room or a brand-new treadmill to create a home gym set-up.”

Forbes also suggesting buying something “fun,” like a new video game console, headphones pillows, pajamas air purifiers and TVs.

Of course, Americans plan to use the check on a number of different objects, from bills to gardens to other items.