A tax refund could be for different purposes. Some people decide to invest that money in the stock exchange market. Others prefer to make contributions to their 401(k) retirement savings accounts. Many people believe that people go on vacation or throw a party, which could be a way to waste the money they just received. Whatever taxpayers do with their tax refunds, it is their rightful money.
It is true that after the pandemic years, many people wished they could do something to unwind and relax after such a tense period. However, the current economic situation is making it difficult for many households to be able to get by. Making ends meet is becoming a real challenge for many people who had to spend their savings on high mortgage interest rates, huge bills, and expensive food. Tax refund checks have become a relief for many.
Will most US citizens spend their tax refund check on traveling and treating themselves?
According to the GOBankingRates survey, not even 4% of American taxpayers will spend their tax refund on travel expenses. What is more, those opting for buying something special for themselves reached 6%. As there is an uncertain economic situation, there are many US citizens that prefer to keep saving in case the situation worsens.
On the other hand, those who have personal loans and mortgages are getting rid of part of their debt or even paying it off. In fact, those who want to save their tax refund money are the largest group reaching 26%. Paying bills and getting rid of debt represent 41% of taxpayers. So, as you can see most people will not go on a trip or getaway to have fun. Using tax refund money to pay debt can help them save on interest rates.
Why have American taxpayers decided to do so?
There are many Americans who have chosen to create an emergency fund with their tax refund. Mainly because they do know what lies in store. The debt they have gotten together with skyrocketing inflation are the ones to blame. If you manage to reduce your debt and monthly payments, you will end up having more money to spend every month. In this way, you can lead a life with a larger budget and avoid living on a shoestring budget.
Sadly, there are many Americans that have to use their credit cards to be able to pay their expenses. The money they owe for their credit card expenditure is increasing due to the exorbitant prices. No doubt inflation is becoming smaller but it is still high for those whose financial situation is not good at all. Interestingly enough, more women than men are interested in getting rid of their debt, while men prefer to invest their tax refund money.