Tax refunds: Urges to save it, spend it clash
Americans may sit on the fence between saving and spending when they initially ponder their upcoming tax refund. But in the end, more will spend it on buying things they need -- and will feel relatively good about their choice, according to Capital One’s “2016 Bonus and Tax Refund Survey.”
When asked whether their first thought about a tax refund would be to spend it on debt balances or needed purchases vs. saving it for a rainy day or retirement, the responses were virtually identical at 40 percent and 41 percent, respectively.
But ultimately, a strong majority (61 percent) reported that they would rather spend their tax refund now on something they need than save it for something they want later (39 percent).
More than half (56 percent) view their refund as money that’s owed back to them by Uncle Sam, with another 17 percent considering the money as extra funds available for necessities. Only 1 in 8 think of their tax refund as “fun money” they can play with.
But spending on needs was reportedly gratifying for most, with 51 percent of respondents saying they feel good about using their tax refund for things they need. Less than a quarter (23 percent) lamented not being able to spend it on things they want.
Conducted by Taylor from March 2-5, 2016, Capital One’s survey sampled 1,000 adults ages 18-54 who self-identified as being eligible for a refund in 2015. The findings were then weighted to correspond with known demographic proportions of the U.S., and were released March 24.
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