What Will You Do With Your Tax Refund?
Will you use your tax refund to pay down debt, buy something special or make an investment? The majority of Americans plan to use theirs on “necessary expenses,” judging by the results of a new survey.
Financial adviser Edward Jones has released the results of a new survey in which 52% of respondents said they would use their tax refund for such things as loans, credit cards and other household expenses. While 30% said they would put the money into a savings account, only 8% said they would invest theirs.
The percent who plan to save their refund has increased in recent years, Edward Jones said – especially among adults between 45 and 54 years old. Not surprisingly, it was the younger respondents, (aged 18-34), who were the most likely to spend their refunds on “fun things.”
It’s also unsurprising that household income has the greatest bearing on what people plan to use their refunds for. Less affluent people are more likely to plan on using their refunds to pay down debt or manage household expenses. It is among households with $100,000 or more in income that we find the majority of respondents planning to save their refunds.
Still, it is a bit concerning that so few respondents to the Jones survey plan on investing their tax refund. Perhaps this is a sign of the times: with money so tight for so many families, it’s necessary to keep the money close at hand. Indeed, other recent surveys find that few Americans have what they consider to be an adequate amount of savings set aside for emergencies.
If you can, though, try to invest even a little of that money. The nice thing about investing is that a little money invested today can grow into a much more substantial amount years later – when you really need it.
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