Most Americans would probably be thrilled if they received an extra $1,000 to spend. Although everyone knows the importance of saving, a recent study by Pew found that 46 percent of Americans spend more than what they make every month.
To learn more about the personal finance habits of Americans, we ran a survey and asked people what they would do if they were given an extra $1,000 in cash. Our survey revealed that about 3 in 10 people would put that amount into their savings.
In our survey, we asked 1,500 Americans what they would do with an extra $1,000. Our results revealed a vast majority of them (75 percent) would use their extra cash for practical reasons like investing, paying off bills and buying necessities.
The idea of using the $1,000 for practical reasons seems to be shared across all age groups. However, there were some slight generational differences. Generation X is 32 percent more likely than Millennials and Baby Boomers to use the money to pay off debt. It’s possible that millennials just haven’t accrued as much debt and Baby Boomers are focused more on saving for retirement.
Millennials are most likely to donate their extra $1,000 to charity
Interestingly, after paying off debt and saving, donating to charity was the third most popular response ahead of traveling, shopping and even purchasing necessities. Our survey revealed that 15 percent of millennials would give their $1,000 to charity as compared to 10 percent of Baby Boomers and only 8 percent of Generation X.
Men and women disagree on how they would spend an extra $1,000
Men and women differed in how they would use their $1,000. While women were more likely to apply their $1,000 toward existing bills and debt, men seemed more willing to funnel their extra cash to savings or investments. We found that men are 35 percent more likely than women to allocate the money for savings and investment, but women are 43 percent more likely than men to allocate the money for paying off debt.
Overall, it seems that when presented with a meaningful amount of money like $1,000, Americans would choose more prudent spending. A significant amount of people in our survey indicated they would save or invest their extra cash. A recent report revealed that almost half of Americans wished they saved their money better, and our poll shows that Americans can use a short-term amount for a long-term purpose.
However, an equally significant amount of people would also use their $1,000 to pay off bills and settle a debt. This suggests that while Americans may be practical in their use of an extra sum of money, perhaps they aren’t as effective at managing their current finances. In order to have healthier finances, it is crucial to balance income and expense and to be able to use any extra money towards saving for the future.