Consumers Will Save, Not Spend, Tax Refunds
With federal income tax returns due this month, many Americans are already thinking about what they’ll do with their refund checks — and most
are putting saving ahead of spending.
“Financial security is top-of-mind for all Americans, and refunds can play a huge role in helping achieve that,” NRF President and CEO Matthew Shay says. “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.”
NRF’s annual survey found that 46 percent of those expecting a refund will put it into savings, up slightly from 44 percent last year and the highest level in the survey’s eight-year history.
Contrary to the conventional wisdom that older consumers are the most financially conservative, the survey found that 58 percent of 18- to 24-year-olds plan to put their refunds in the bank — the highest rate of any age group. Prosper Insights Director Pam Goodfellow, who conducted the survey for NRF, attributed the trend to lessons young people learned from their parents during the recent recession.
Thirty-eight percent of survey respondents plan to use the money to pay down existing debt, a quarter will use it for everyday expenses and only 11 percent will splurge on a major purchase.