An economic stimulus check and hundred dollar bills on top of American flags.

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President-elect Joe Biden is urging lawmakers to pass another coronavirus stimulus bill as soon as possible. Biden is far from the only one urging Congress to authorize more stimulus money, which many view as critical to helping bolster the economy and aid Americans through the COVID-19 crisis.

With the issue of a second stimulus check up in the air, it's worth considering what people did with their first checks. Data from the National Bureau of Economic Research (NBER) provides some insight, and the news is good. Most people made responsible choices with the money. 

While the direct payments likely helped many American households during a time of crisis, there's one group that may get the most long-term benefit from the COVID-19 checks: families living paycheck to paycheck. 

How the coronavirus stimulus check could help paycheck-to-paycheck families in the long run

According to the NBER data, around 31% of Americans used the coronavirus stimulus money made available by the CARES Act to repay debt. Surprisingly, the research showed that "liquidity-constrained" families were especially likely to be among this group that put the payment toward their debt obligations. 

Liquidity-constrained families are those who can't pay unexpected bills equaling their monthly income. These families essentially have little to no savings and live paycheck to paycheck. Many economists make the assumption that when people who are living without savings get an influx of cash, such as the COVID-19 payments, they tend to spend the money. But the data this time shows this didn't happen, and many instead used it to pay their creditors. 

The good news is this decision could make a huge difference in the long-term financial stability of those who used their coronavirus money to reduce their debt burden -- especially those who normally wouldn't have had a large lump sum like this. 

Let's take a look at why. Those who paid down debt with their checks have reduced the total interest costs they'll owe over time by lowering the principal balance. That means they'll keep more money in their pockets that they can use toward other financial goals. Paying interest to a creditor makes all of the original purchases more expensive and commits future income to repayment of past purchases. Both of these can make it really hard to get ahead financially. 

And if the coronavirus check was enough to fully pay off a debt, or will make that happen sooner, paycheck-to-paycheck families will have one less monthly obligation eating up so much of their income and leaving them with too little to save. Without that debt, it may be easier for those families to build an emergency fund to avoid debt in the future or to accomplish other financial goals. 

Americans need more stimulus money

The coronavirus stimulus check may have a long-term positive impact on paycheck-to-paycheck families by getting them closer to debt freedom. But the fact is that millions of people need more COVID-19 money in their bank accounts to shore up their financial situations. 

Coronavirus cases are spiking again and governments are imposing further restrictions, while unemployment is still near record highs. Lawmakers should take action to provide the financial relief people need to get through this difficult time -- especially since so many people made smart choices with their first check.