Consumers Build Confidence by Saving Tax Refunds

Other popular uses for tax refunds include paying down debt and making everyday purchases.
March 03, 2016

WASHINGTON – Planning for the future is top of mind for Americans this year, with more consumers than ever putting their tax refunds into savings. According to the National Retail Federation’s annual Tax Returns Survey conducted by Prosper Insights and Analytics, 49.2% of those expecting a refund plan to save the money rather than spend it right away, the highest percentage in the survey’s history. Nearly two-thirds (65.5%) of those surveyed expect a refund.

“Consumers are boosting their confidence and building their spending power as they set aside their checks from Uncle Sam,” NRF President and CEO Matthew Shay said in a press release. “Americans this year see refund season as a time to improve their financial health by using their refunds to get ahead on savings goals, pay down debt and plan for purchases in the future. Money saved is spending potential down the road.”

Consumers know just what they want to do with their refunds this year: In addition to savings, 34.9% plan to pay down debt and 22.4% will use the refunds for everyday expenses. While 11.4% plan to book a vacation, 9.2% plan to spend their money on major purchases like a television or car. Splurges are still in the cards for some, with 8.3% planning to indulge on a purchase like a salon or spa service or an elaborate night out.