More consumers to save tax refunds, not spend
February 28, 2014
Washington--Nearly half of consumers recently surveyed said they will be saving their tax refund money this year rather than spending it, according to the National Retail Federation.
The NRF’s Tax Return Survey found that 46 percent of respondents expecting a refund will put their money into savings, up from 44 percent last year and the highest percent in the survey’s history.
“Financial security is top-of-mind for all Americans, and refunds can play a huge role in helping achieve that,” said NRF President and CEO Matthew Shay.
In addition to saving, 38 percent of respondents said they would pay down debt with their refund, 25 percent will use it toward everyday expenses, 13 percent will take a vacation and 11 percent will invest in a major purchase. (Survey-takers were allowed to select more than one use for their tax refunds.)
The survey also showed that it is young adults who are most likely to deposit some, if not all, of their refund directly into their savings accounts.
According to the NRF, 58 percent of survey-takers between the ages of 18 and 24 will contribute to their savings account with their refund, higher than any other age group. They will also use the money for everyday expenses (34 percent), to pay down debt (30 percent) or for a major purchase (18 percent).
“Young adults today are extremely smart about their money, and will look for ways to reap the benefits of their hard work that comes from their refunds. It’s also likely that 18- to 24-year-olds have learned from their parents the valuable lesson of saving for a rainy day, thanks in part to the Great Recession and current economic conditions,” said Pam Goodfellow, consumer insights director at Prosper Insights & Analytics, the company that conducted the NRF survey.
When it comes to completing their taxes, 65 percent of the survey’s respondents said they would do so online, up from 63 percent last year and the highest percent in the survey’s history.
Another 38 percent of respondents said they would prepare their taxes on their own using computer software, up from 37 percent last year. Others will manually prepare their taxes (12 percent), use a tax preparation service (17 percent), use an accountant (23 percent), or look to a spouse, relative or friend for help (10 percent).
While 23 percent of survey-takers have already filed their taxes, 37 percent will file this month and 26 percent will do so in March. Another 15 percent will wait until April to file, close to the deadline.
The NRF’s Tax Returns Survey was conducted by Prosper Insights & Analytics from Feb. 4 to 10, and was designed to gauge consumer behavior and shopping trends related to tax returns.