infographic, Taxes

How Americans Spend their Tax Refund #Infographic

Tax Refund #Infographic | www.TheHeavyPurse.com

While conventional wisdom suggests that an overly large tax refund isn’t ideal since you’ve been giving the government an interest-free loan, many people still eagerly anticipate getting a big refund every year. Thanks, in large part, to their dreams about how they are going to spend it, because in their mind, it’s free money.

There is a lot of marketing done to perpetuate that belief, often to further the idea the best use for your refund is to spend it. Don’t forget — it’s not really free money. You are being returned money that you earned because you over-estimated your taxes.

Drive Time put together a nice infographic on how Americans will spend their refund and broke it down by gender too. I liked seeing that paying down debt and savings were the top two choices. It’s fine to spend money on something you enjoy, just make sure first that you’re on track with your savings goals, emergency fund and don’t create new debt by buying something or taking a vacation that your refund doesn’t cover.

Tax Refund #Infographic | www.TheHeavyPurse.com

If you’re receiving a tax refund this year — how do/did you plan to spend it?

Shannon

The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

March 13, 2015  •  19 Comments  •  infographic, Taxes

Leave a Comment

Comments

  1. Friday, March 13th, 2015
    I overpaid my quarterly taxes again so I am getting a refund. I am not that great at estimating my tax liability for some reason! Oh well.
    We will probably just send our refund back on April 15th when I owe my first installment of quarterly taxes.
    • Shannon Ryan
      Saturday, March 14th, 2015
      It seems like when we have to estimate our taxes, we tend to play it a bit safe. At least you'll have your first installment for 2015 covered. :)
  2. Friday, March 13th, 2015
    I try to treat my tax refund just like any other income. Adding it to my budget and dividing it between savings goals.
    • Shannon Ryan
      Saturday, March 14th, 2015
      That's a smart way to handle your refund, Stefanie.
  3. Friday, March 13th, 2015
    Nice infographic Shannon! We owed a few hundred dollars last year, so no plans like this for us. :) As for this year, if we get anything back I'm sure it'll be relatively small so it'll likely just go in our vacation fund or included in our quarterly payment for April.
    • Shannon Ryan
      Saturday, March 14th, 2015
      Sounds like you did a good job estimating your taxes last year if you only expect a small refund!
  4. Friday, March 13th, 2015
    I haven't seen a tax refund in years, but it's fascinating to see what people do with it. The worst thing for me to see is people treating it as though it's part of their regular income when it can be used to help with larger savings goals or debt management.
    • Shannon Ryan
      Saturday, March 14th, 2015
      It is always interesting to see how people use their tax refund. The average is a fair sum of money and can really make difference against goals.
  5. Friday, March 13th, 2015
    I seriously doubt I'll have a refund this year. But if I did get a refund, I'd probably put most of it toward debt and the rest toward savings. I do have money saved up to pay my tax bill and if I owe less than expected, I'll put the extra I've saved toward those same two things, debt and savings.
    • Shannon Ryan
      Saturday, March 14th, 2015
      It sounds like you have a good plan in case you do get an unexpected refund!
  6. Friday, March 13th, 2015
    I'm shocked at how high the saving and paying down expenses percentages were! That's not bad considering how negative a lot of bloggers and others talk about Americans. I will be so excited if we get a tax refund. We really spent a lot of time and effort planning taxes this year. Here's to it paying off!
    • Shannon Ryan
      Saturday, March 14th, 2015
      I was impressed by the percentage who would pay down/off debt and save their tax refund too, DC. Those should be the first priorities with any refund. Fingers crossed your effort paid off with your taxes - I'm sure it did!
  7. spiffi
    Saturday, March 14th, 2015
    I get a big refund nowadays because I have a mortgage - so I put my refund as an extra principal payment on the mortgage.
    • Shannon Ryan
      Saturday, March 14th, 2015
      Sounds like an excellent use of your refund. :)
  8. Saturday, March 14th, 2015
    I am receiving a tax refund this year and planning to use it to pay my student loan so that I have less problem to deal with. I want to buy splurge it on watch and clothes, but no.
    • Shannon Ryan
      Saturday, March 14th, 2015
      I hear you on wanting to splurge, but you're making a good choice to use it on your student loans. :)
  9. Saturday, March 14th, 2015
    We wil be putting any tax refund money in our Roth IRAs, which is the same thing that we did last year! Interesting info graphic!
    • Shannon Ryan
      Saturday, March 14th, 2015
      Sounds like a great plan, Dee!
  10. Friday, March 20th, 2015
    After I received my tax refund this year, I deposited it straight into my IRA! I intend to do that each year if I do receive a tax refund. Thanks for sharing this infographic! I was very impressed with the percentage of people that put their tax refund towards savings and driving down debt.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
Facebook Twitter YouTube