(Un)Surprising Things People Spend Their Universal Basic Income On

Adrian Volenik

May 25, 2024
4 min read

“7 Surprising Things People Spend Their Universal Basic Income On”

When it comes to Universal Basic Income (UBI), a common question that arises is how recipients use this financial resource. In essence, what exactly do people who get UBI spend money on?

Based on various reports and studies, the spending trends of UBI recipients vary greatly.

Some may opt for essential needs, while others may invest in personal or professional development.

To further explore this topic, we have gathered a list of seven (un)surprising things that people often spend their UBI on.

This list is sure to shed some light on the financial behaviors associated with UBI.

1. Essential needs

First and foremost, people who receive UBI often spend it on their essential needs. These needs include food, housing, utilities, and other daily necessities.

Given that UBI is designed to provide a safety net, it’s unsurprising that a significant portion goes towards these fundamental expenses.

This is especially true for those who may be struggling financially or lack a stable income.

Research has shown that with the additional funds from UBI, recipients are able to better meet their basic needs.

This not only improves their quality of life but also reduces stress and anxiety related to financial insecurity.

For instance, in a pilot program in Stockton, California, the majority of UBI funds were spent on food and merchandise. This shows that when given the choice, individuals prioritize their basic necessities over non-essential items.

Let’s take a closer look at how UBI recipients typically allocate their funds:

Food and groceries
Housing (rent or mortgage payments)
Utilities (electricity, water, internet)
Transportation costs (public transit or car-related expenses)

While each person’s needs may differ, it’s clear that UBI plays a crucial role in helping people meet their essential needs.

2. Debt repayment

Another common use of UBI is for the repayment of debts. Managing debt can be a significant source of stress and hardship for many people.

With the help of UBI, some recipients find it easier to reduce their debt levels and improve their financial stability.

UBI offers a steady source of income that can be leveraged towards paying off credit card balances, student loans, mortgages, or other forms of debt.

This not only helps to lower the overall debt burden but also aids in improving credit scores and financial health in the long run.

A study conducted in Finland found that after receiving UBI, recipients were less likely to experience financial difficulties.

This indicates that UBI could potentially play a pivotal role in debt management and poverty reduction.

Debt repayment might not be the most exciting way to spend money, but it’s certainly a wise one.

With fewer debts to worry about, people can focus on other aspects of their life without the constant worry of financial obligations hanging over their heads.

3. Education and skills development

UBI recipients also often invest in their future by spending their funds on education and skills development.

This could involve enrolling in college courses, attending workshops, purchasing books or other educational materials, or even hiring a tutor or coach for personalized guidance.

Spending UBI on education is seen as an investment in personal growth and future earning potential.

By acquiring new skills or enhancing existing ones, individuals can improve their job prospects and potentially increase their income in the long run.

For instance, a UBI experiment in Kenya found that some recipients used their funds to pay for school fees and buy educational materials for their children.

This demonstrates the value placed on education and the desire to break the cycle of poverty through learning.

The freedom provided by UBI allows individuals to pursue educational opportunities they might not have been able to afford otherwise.

In this context, UBI serves as a tool for empowerment, enabling recipients to take control of their own personal and professional development.

4. Healthcare expenses

Healthcare is another critical area where UBI recipients often allocate their funds.

This might include regular doctor’s visits, medication, therapy sessions, or other health-related expenses.

Having a steady income through UBI can help cover these costs and ensure access to necessary healthcare services.

This is particularly beneficial for those who might not have health insurance or for whom out-of-pocket healthcare costs are prohibitively high.

It’s worth noting that good health is not just a fundamental human right, but also an essential aspect of a person’s overall wellbeing and productivity.

By enabling access to healthcare services, UBI can contribute to improved health outcomes and quality of life.

In fact, a study in Manitoba, Canada showed that hospital visits dropped by 8.5% among UBI recipients, suggesting that improved financial stability can lead to better health.

Investing in health is investing in one’s future, and UBI provides the means for many to do just that.

5. Savings and investments

A portion of UBI recipients also opt to save or invest their funds for future use.

This could involve putting money aside in a savings account, investing in stocks, bonds or real estate, or even starting a small business.

The ability to save or invest is a reflection of financial security. It suggests that an individual’s immediate needs are met and they have the capacity to plan for their future.

For many, UBI provides this opportunity to build financial resilience and work towards long-term goals.

A pilot project in Iran found that many UBI recipients used their funds to start or expand small businesses.

This not only generated additional income but also stimulated local economies.

Whether it’s saving for a rainy day, investing for retirement, or funding entrepreneurial endeavors, UBI offers the financial flexibility needed to make these plans a reality.

6. Personal and family wellbeing

UBI recipients often prioritize personal and family wellbeing, using their funds to improve their overall quality of life.

This may involve spending on recreational activities, hobbies, or family outings that contribute to happiness and life satisfaction.

The additional financial support provided by UBI can enable individuals to engage in activities they enjoy or spend more time with their loved ones without worrying about cost.

This can lead to improved mental health, strengthened family bonds, and an overall increase in wellbeing.

For instance, a UBI trial in Finland reported that recipients experienced less stress and had better mental health.

This suggests that the financial security provided by UBI can have positive effects on personal wellbeing.

In this way, UBI not only supports physical needs but also caters to the emotional and psychological needs of individuals, thus promoting a more holistic approach to well-being.

7. Philanthropy and community support

Finally, some UBI recipients choose to use a portion of their funds to give back to their communities or support causes they care about.

This could involve donating to charities, supporting local businesses, or sponsoring community events.

While this may not be the most common way UBI is spent, it highlights the potential of UBI to foster a sense of community and encourage generosity.

With their basic needs met, individuals have the freedom to extend their support to others in need.

For example, during the COVID-19 pandemic, some recipients of emergency UBI in Spain chose to donate part of their funds to support local businesses affected by the crisis.

This act of solidarity demonstrates how UBI can stimulate community resilience and mutual aid in times of hardship.

In this sense, UBI not only benefits the individual recipients but also has the potential to positively impact wider communities and society at large.