5 Popular Ways People Spend Their Tax Refunds
Every year, people across the United States are faced with an extremely difficult decision: should they save their tax refund money or spend it on something they have always wanted? Even individuals with the best intentions of saving their money sometimes change their minds once they hold their refund check in their hands. If you are not sure what to do with your check from Uncle Sam once it arrives, you may get some ideas by reading about the top five ways people spend their tax refunds.
1. Buffer Your Savings Accounts
As surprising as it may be, most Americans are actually fairly prudent with their income tax returns. Almost half of Americans receiving refunds reported in a nationwide poll that they put at least some of it into a savings account. The saving rates in America have dropped significantly in recent years, meaning this may be the only time some families have a enough surplus to justify saving.
2. Everyday Expenses & Budgeting
About 35 percent of adults surveyed typically spend most or all of their refunds on more practical uses, such as purchasing food for their families, paying down their monthly utilities, and making repairs around the house. For many families, tax returns are an essential way to make ends’ meet and improve their living space each year.
Around 34 percent of individuals receiving a refund plan to put at least some money towards saving and investing in the stock market or similar items. Although this may seem like a boring way to spend tax money, it is a wise investment in the future that will yield financial benefits years down the road.
4. Pay Down Debt
Approximately 31 percent of Americans have reported that they typically use their tax return to pay down their debt and increase their financial freedom. With student loans, credit card, and medical debts at all time highs, it is unsurprising to hear that families hope to get ahead on payments with this annual windfall.
5. Live it Up!
A very small percentage of Americans (around 11 percent) are expected to splurge with their refunds this tax season. Some of the most popular destinations for their refunded cash include new clothes, fancy jewelry, vacations, electronics, and gifts for friends and family. New, must- have gadgets are appearing every month, and the extra cash flow from a tax return can offer a much-needed escape from the daily grind.
Is There a Better Option?
Although Americans have shown that they are surprisingly responsible with their refunds for the most part, they could be setting themselves up for even more financial freedom in the future by using their refunds to start a business. Unlike investing in the marketplace, investing in your own business can yield quicker and more worthwhile financial results. The National Tax Office makes it easier than ever to start your own business as a professional tax preparer. If you choose to use your refund to build your business now, you can set yourself up for a more comfortable financial future. Don’t settle for financial mediocrity. Experience a taste of financial freedom by partnering with National Tax Office and starting your own business.