Americans Plan to Use Tax Refunds to Bulk Up Savings and Pay Down Debt
Nearly half of Americans expecting a tax refund plan to use it to boost their savings, while more than one-third plan to pay down debt.
Having a multitude of options for how to use their tax refunds, more Americans this year are opting to stash their cash away for a rainy day. According to the National Retail Federation’s Tax Returns Survey conducted by Prosper Insights & Analytics, 46 percent of those expecting a refund this year will put their money into savings, up from 44 percent last year and the highest percent in the survey’s history. Two-thirds (66.6 percent) of those surveyed are expecting a refund this year.
“Financial security is top-of-mind for all Americans, and refunds can play a huge role in helping achieve that,” said NRF President and CEO Matthew Shay. “Whether consumers use a refund to pay down debt, bulk up their savings, or buy that big-ticket item they’ve been saving for, a check from Uncle Sam, large or small, goes a long way these days.”
As for other ways consumers will use their refunds, 37.7 percent will pay down debt, and one-quarter (25.3 percent) will use it towards everyday expenses. One in 10 (10.7 percent) will treat themselves and invest in a major purchase, and 12.8 percent will spend their refunds on a vacation.
Young adults between 18 and 24 will make the most of what Uncle Sam gives back this year, with nearly six in 10 (57.7 percent) planning to contribute to their savings accounts, higher than any other age group. They are also the most likely to use their refunds for everyday expenses (34 percent) and to purchase a big ticket item such as a new television or piece of furniture (18.3 percent). Three in 10 (30.2 percent) will use their checks to pay down debt, second to last behind those 65 and older (27 percent).