Toni Quero talks about the picture window she hopes to replace with money from the economic stimulus check she received from the government in Northfield, Vt. Many checks are being gobbled up by the rising cost of living.

CHICAGO — Many Americans allowed themselves to fantasize about large-screen TVs, European vacations and other luxuries when they learned of the federal rebates they'd be getting this spring and early summer.

Or maybe — shh, don't tell the president — they'd pay off a credit card or set the rebate aside for a big purchase in the future, notwithstanding Washington's intentions that they pump it immediately into the flagging economy.

"It's not often you get a windfall like that that you can just stash away for something you need later," said Sara Jackson, 29, a graphic designer in Chattanooga, Tenn.

But reality has interfered, in the form of ever-climbing food bills and $4-a-gallon gasoline. While some consumers got their dream TVs, as confirmed by a spike in April retail sales in anticipation of the economic stimulus payments, day-to-day living costs have sopped up the checks for many other early recipients and spoiled their rebate fantasies.

Based on a small but broadly diverse group of consumers who tracked their rebate spending in detail for The Associated Press, there was no mass rush to the malls for shopping sprees after the payments started showing up in bank accounts in significant numbers in May. The greater economic ramifications may not be seen for months.

Vanessa Church, a 49-year-old Chicagoan with six children, was grateful for the rebate but found there wasn't much left over after big payments for utilities and other basic needs were taken care of. "Things are getting tighter and tighter," she said, adding jokingly: "I'm thinking they should do this twice a year."

Brandi Dobbins, 26, and her fiance each got their $600 checks just before their May wedding on the coast of Maine. The combined amount was spent almost instantly when their caterer called and, after asking 'Are you sitting down?', informed her that due to food inflation their bill for the wedding was jumping from $46.50 per guest to $59 — virtually the entire $1,200. "In the economic grand scheme of things, I'm not quite sure that's what they intended us to spend our money on — inflation — but that's where ours went," Dobbins said.

Derek Houck, an actor in North Hollywood, Calif., planned to allow himself an indulgence or two with whatever was left of his rebate after he'd taken care of necessities. It turned out to be more modest than he'd thought. When his personal finance software program showed him he had a whopping 50 cents left from the $600, he still celebrated by shelling out $49.95 for a new Wii game.

All told, 131 million households are to receive a total of $110 billion by the time the last payments are doled out in mid-July. What people do with them will help shape the direction of the sputtering economy.The last time Washington undertook such a program to combat an economic slowdown, taxpayers got rebates of $300 or $600 in the summer and early fall of 2001. The eight-month recession was over by November, but it's not clear how much the payouts helped.This year's program provides more money, aimed at delivering a bigger shot of adrenaline to the economy by inducing people to buy items they didn't otherwise have the cash for.Most individual taxpayers are getting checks of up to $600, while couples receive $1,200 plus $300 for each eligible child under 17. People earning too little to pay taxes but at least $3,000, including seniors whose only income is from Social Security, get $300 if single or $600 if a couple. And there are no payments for the wealthy: The amount starts to phase out for those with incomes over $75,000, or $150,000 for joint filers.Based on economists' preliminary assessments, and echoed by the AP sample group of more than two dozen people, Americans are not hesitating to spend the money — but more for essentials than was anticipated. It's easy to understand why: Gas prices are up more than 30 percent since the rebate check amounts were first announced and food prices are projected to increase 5 percent or more in 2008.

Some economists are now saying we will avert a recession, or at least a severe downturn. Don't tell that to people who have seen their living standards squeezed by the markups in supermarkets and at the pump — like Church, who's raising six children on Chicago's often hardscrabble West Side."We're definitely in a recession — I can feel it," she said over a sandwich in the cramped, bustling offices of the weekly neighborhood newspaper where she is a lifestyles and religion writer. "We get so much less for the same money. Milk and eggs and bread and vegetables and fruit are all very expensive. So the rebate was a good idea for that."Being pinched didn't prevent Church and her husband from contributing $120 of her $1,200 rebate to their church — they tithe 10 percent of everything they earn, in good times and bad.The rest went fast: $350 for a son's eighth-grade class trip to Washington, D.C., $345 for an end-of-winter balloon payment on their heating bill, $225 for a daughter's water-damaged cell phone and bill, $100 for their 15-year-old son's savings account and $60 on transit passes.Church, who describes herself on a networking Web site as "a certifiable, bona fide bibliophile and the proud owner of over 5,000 books," might have liked to make a few additions to her library or spend something on herself. Not at times like this, she can't. But she's not complaining about a payment she sees as a blessing."I don't know how it affected other people's budgets overall, but it helped our money stretch," she said. "I thought it was a really cool thing. It made me see my president in a different light. I was like, 'Attaboy George!' I can be swayed, I can be bought!"Angela Anderson, 50, of York, Pa., thought for weeks about how she might spend her tax rebate. She could create a gas account for the rising cost of her 54-mile daily commute, pay off credit-card debt, buy a piece of local original art, put some toward a trip to Europe, and maybe use anything left over to treat herself to a massage and manicure.Alas, when the money showed up it was less than expected at $300, owing to the fact that she was unemployed for much of last year. So by the time she wrote two $250 checks to her son Michael and her daughter Jenna to support them on unpaid college internships, it was more than gone.Despite the disappointment, she was thankful."Anything I can do to set a couple of bucks aside so I can pay for the increased cost of living, I'm grateful," said Anderson, public relations director for an art school. "As a single parent, earning just a bit over $50,000, things are always tight for me."

Hung Nguyen is one of those who dreamt of a fancy new TV and got it, thanks to his payment. The 26-year-old New Orleans resident spent his $600 stimulus check the same day he received it on a 32-inch plasma television for the bargain price of $400, using the rest to pay credit-card bills.Nguyen, who works for the Federal Emergency Management Agency, lives with his parents and lost everything in Hurricane Katrina. They have since rebuilt, and he felt secure enough financially to spend the rebate on something that wasn't a necessity."I guess I kind of just spent it as it was intended for, to boost the economy," he said.For three years, he drove a car with no air-conditioning — a major sacrifice in the sticky-hot South. Now he finally feels he has a good job and can buy things he wants, not just needs.While Nguyen doesn't consider himself overly thrifty, he didn't start out intending to buy a TV. Initially, he thought he'd buy himself new glasses and pay off bills. But his brother saw the TV at a store and Nguyen thought 'Why not?' "It was worth it," he said. "The picture is awesome."