Waiting For That Check! Nearly 70 Percent Of Americans Will Use Their Tax Refund To Pay Off Debt
Will you spend your tax refund on repaying your debt? If so, you are among the 68 percent of Americans polled recently by the National Foundation for Credit Counseling who said their refunds would be used to pay bills. And if tax refunds fall in line this year with last year’s average of $3,034, that could really put a dent in personal debt.
More than 1,000 were surveyed and 15 percent of the respondents said they would use their refund for basic necessities and 11 percent will add their refunds to their savings accounts, reports Time. Surprisingly, only two percent said they will use it as “fun money” for a vacation or shopping spree. Lastly, four percent don’t know how they will use their refunds.
Another wise way to use your refund would be to contribute to a Roth IRA, reports Forbes. Roth IRAs lets you save money that will grow to be tax free after you turn 59 1/2 years old (the account has to be open for at least five years). If you contribute every year for 20 years the amount would grow to more than $118,000 tax free.
U.S. bonds would also be a great thing to buy with your refund. “If you’ve maxed out your retirement accounts, U.S. Savings Bonds offer you another vehicle for tax-deferred growth (plus, they are tax free at the state and local level),” reports Forbes.
So be smart this year when spending your tax refund. Think long term.