Americans Hold Tight to Tax Refunds
Are you expecting a tax refund this year? If so, are you putting that money toward a big splurge—or socking it away toward your nest egg?
If you’re trying to be responsible with that refund check, you’re in good company. A survey from TD Ameritrade of 1,000 investors finds that nearly half expect to receive a refund this year—and that more than half of those folks plan to put that cash to smart use.
According to the poll, 61% plan to invest or save their refunds, and 21% expect to use the money to pay off debt. Only 19% say they’ll make a non-essential purchase.
Millennials in particular, who withhold more money from their paychecks, are more likely to get money back, and an impressive 67% of respondents in that age range say they will save or reinvest their refunds.
If you’re expecting money back from Uncle Sam, it’s worth thinking ahead about what you’ll do with it. Is there an ultimate financial goal you want to put it toward? Or are you tempted to go on an impromptu exotic getaway?
Here’s a trick to help you make your decision: Look at that money as cash that’s already yours. You didn’t actually gain any money—you just lent someone cash, and they’ve returned it.
Now how do you want to spend it?