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Survey: U.S. Consumers Plan to Save Their Tax Refunds

Feb 20, 2015 9:27 AM   By Jeff Miller
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RAPAPORT... Nearly 66 percent of U.S. consumers anticipate receiving a tax refund this year and  46.9 percent plan to apply all or some of these funds to their savings,  the highest percentage to date, according to the National Retail Federation (NRF) and Prosper Insights and Analytics. In addition, 39.1 percent expect to use the funds to pay down debt,  25.1 percent will apply it toward everyday expenses, 13 percent plan to use all or some of the refund for a vacation and 10.5 percent may make a major purchase.

Interestingly enough, the NRF also asked a hypothetical question of consumers. If Congress enacted tax reform that provided the average household with an additional $1,200 in take-home pay this year, what would they use it for? And once again, the majority (or 49.1 percent) would apply all or some of that money to savings. Forty-two percent would use all or some of the extra cash to pay down debt, 26.5 percent would apply it toward everyday expenses and 11.2 percent would use it for a vacation, while 9.3 percent would make a major purchase and 7.7 percent would splurge on something such as apparel, jewelry, a spa or dining out.

The NRF surmised that the mood across the consumer marketplace is trending toward "playing it safe and planning ahead."

“Americans are thinking of the future and remaining financially secure is a big part of that,” said NRF's president and CEO, Matthew Shay. “A check from Uncle Sam gives consumers the ability to pay down debt, add a cushion to their savings or splurge on a vacation or big-ticket item.”

The survey revealed that young adults are making wise decisions for their future as 54.9 percent plan to put their expected refunds into savings. Pam Goodfellow, the director of Prosper Consumer Insights, said, “Perhaps having learned a few financial lessons from their parents during the economic downturn, it appears that millennials are looking for ways to get ahead. Less likely to be saddled with mortgages and accumulated debt, tax refunds represent the perfect opportunity for younger consumers to invest in their future.”

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Tags: Consumers, Jeff Miller, Millennials, NRF, retail, spending, survey, tax refunds
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