More Workers Plan to Save Tax Refunds
How are you planning to spend your anticipated tax refund? The IRS says this year's average refund will total about $3,000, which can go a long way. Are you going to buy a new, high def plasma TV? Take a nice vacation? Maybe use it to fortify the retirement savings you raided during the recession?
If you're like 46 percent of your fellow refundees, you plan to use your tax refund to pay off bills. That number is down from 56 percent last year who planned to use it that way last year, which means that this year people are paying down their debt and becoming more confident about spending.
In addition, more than one-third (36 percent) of workers report they will use their tax refund to augment their savings accounts, up from 34 percent who said the same last year. That's according to the annual CareerBuilder survey, which found that workers may be feeling a little more fiscally secure because fewer are living paycheck to paycheck.
While more than six-in-ten (61 percent) said they currently live paycheck to paycheck, this is down from 77 percent who said the same in a study conducted last spring. In addition, 79 percent of workers said they haven't reduced their 401 (k) accounts or personal savings in the last year.
Although the majority of workers will use their tax refunds to put into savings or pay off bills, others said they will use their refunds for the following:
- Make home improvements
- Go on vacation
- Pay back money they owe to people
- Invest it
- Buy a car
- Pay for a wedding
- Donate to charity
- Schedule doctor visits
- Pay down mortgage
- Buy a new computer
- Pay for college
"Even though fewer workers are living paycheck to paycheck and are saving more, workers' wallets are still feeling the strain of the past few years," said Rosemary Haefner, vice president of human resources for CareerBuilder. "As the economy gradually rebounds and strengthens, workers are gaining confidence. We're seeing this already as more are investing in their futures and preparing for challenges down the road."
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