What Are You Going To Use Your Tax Refund For This Year? 28% Say "To Pay Off Debt"
The comparison shopping website PriceGrabber.com just completed its "what are you going to do with your tax refund?" survey for the second year in a row, and not surprisingly there are some notable differences between last April and now. The biggest change is among those who plan to spend the money: it was 44.0% in 2008, but only 29.2% this year.
That's probably because fewer respondents are receiving refunds this year. In 2008, 20.0% said they did not receive a refund, while this year 33.9% said they didn't. It's also probably because 56.74% agreed with the statement, "I have made a concerted effort to cut back in the past few months because of the weakening U.S. economy," compared to doing nothing or saying that they save money regardless.
PriceGrabber also asked those who are spending their refunds just what they plan to spend them on. Here were the responses:
[Update: Oh dear lord, are some of you on crack? Every time we post anything about a survey, the anti-survey crowd comes out. Yes, of *course* they asked if you were going to save your refund—what do you think is implied by only 29.2% saying they plan on spending it?—but that's not what this post is about. However, in an attempt to prevent the comments from being derailed by the "where's the savings option?" crowd, here's another chart.]
Note: Whenever we post survey stuff like this, a lot of you ask for details about how the survey was constructed. We're one step ahead of you this time—we asked for the same info, and here it is.
2009 Tax Rebate Survey Methodology
For the 2009 PriceGrabber.com Tax Rebate Survey conducted between April 7, 2009 and April 22, 2009, PriceGrabber.com designed and fielded a Web survey to reach each consumer who recently made an online purchase from one of our 13,000 retailers and sellers. After completing an online purchase, each online consumer received an email confirmation, which included the URL to the Web-based survey. Of a total of 359,233 US online consumers invited to take the survey between April 7, 2009 and April 22, 2009, up to 1,574 adequately completed the survey. The online survey was comprised of 7 close-ended questions. Respondents were asked about their plans for their tax refund money, their situation in the current state of the economy, and additional demographic data.
The sample set reflects the online consumer population by age, gender, neighborhood type and total income level over the 15 days the survey was administered. Of the total respondents that opened the survey, 86.5% completed the survey and 13.5% partially completed the survey. The final 1,574 respondents used in this study were controlled for quality. Respondents that incorrectly answered a trick question and/or completed the survey considerably faster than the average respondent speed were removed from the sample set. The maximum sampling error for the survey data based on the sample of 1,574 respondents is +/- 3 percentage points at the 95% confidence level.
(Photo: NickStarr)
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Comments:
Tax refund? Ohh the money that I spent already? Lets see....it went to everything except for stuff I wanted/stuff for myself. : (
@nataku83: I hate online polls. Not only are they not scientific, but they're often so poorly planned and designed that they omit obvious choices like "I didn't get a tax refund" or "savings".
Not too surprising. Rather sad how many are having to spend the money on necessities though. I fall into the travel category myself. If it wasn't for my refund, I wouldn't have been able to afford the plane tickets back to VA so we can visit with my boyfriend's family for the first time in over two years.
Yeah, where's the option for savings? We took our federal return and paid off two cards. Woot! Then we took our state return and got a patio table, so we can enjoy eating at home more.
50% made two extra mortgage payments against the principal, 25% goes into the house projects fund, and my wife and I split the final 25% to be used at our discretion, which for me will probably mean putting it into my savings account.
It WAS going to be an engagement ring downpayment but my current employer promoted from NY to Boston but it wasn't a high enough promotion to warrant a re-location package (y'know we're in hard times if you didn't know) so thats where all my money went and I mean all of it. Moving costs, new utilities on top of my old ones from last month, deposit, security, travelling round trip NY-Boston 4 out of 5 days. All of it on my dime. Now when I was supposed to be making money my check is even lower because instead of doing my job and making $ I'm training these neophytes. But hey I do live in a nice area with a cheaper rent. Please send me $1000 so I can afford this month...kidding but not really..sigh
I would think if you are getting a refund, you would have filed and spent it long ago. I think we got our refund back in the middle of February.
I received our refund in March and we paid off our medical bills from my son's birth back in December 08. Next year, since I'll get to itemize my return, and having two kids, I'm looking to bring in $3-4k. :D
@Coach Cal Is My Dream Weaver: They don't even have an 'Other' option. I spent what I got from Federal (I owed the State) but it doesn't even come close to fitting in those categories.
@Saboth:
Oh, one reason we filed as early as possible, I was afraid states might delay on their refunds due to the recession...and sure enough, they hired like 1/2 the temp workers this year to cut costs, and refunds are delayed (if you are filing recently).
What a joke. Tax cut for 95% of Americans.
At least here in New York City, the tax "refund" will be more than eaten up by some combination of proposed: higher transit fares; higher taxi fares; higher rental car fees; higher car registration fees; higher cell phone taxes; higher electric bill taxes; higher income taxes; higher real estate taxes and on and on.
If you really believe there is a tax refund, perhaps you would like to buy a bridge that goes from Manhattan to Brooklyn?
Paid of the minimal debt I had and put the rest into savings for a new auto. This POS Bimmer is on its last leg.
Everything went into savings. All of it. Do not pass go, do not collect $200. I didn't see a dime of it because I deposited it into my savings.
I'm hording the cash; this country's f'd.
@maxx22: On one hand, you are losing sight of the fact that Obama's proposed tax cuts that will have 95% of Americans paying less did not take effect in time for us to see the results on our 2008 tax return. I owed this year myself--and quite a lot, as both my and my husband's incomes combined pushed us into a higher tax bracket (thanks, marriage penalty).
On the other hand, you are correct: New Yorkers and others who live in large urban areas--I'm thinking Boston, DC, San Francisco, Chicago, LA, chiefly--will see tax benefits eaten up more so than others across the country, and we already shoulder a proportionately higher tax burden relative to lifestyle because our incomes don't go as far as they would somewhere else. I look at that as the price of a lifestyle that was my free choice and could be freely changed, don't get me wrong--I love NYC and I have no immediate plans to leave--but it is a fact that taxes hit us and other urban dwellers harder.
I can understand wanting to get a refund because it's fun to get that big check, but if you're using it to pay off debt, shouldn't you readjust your W4 so instead of a refund you're getting more money in your paycheck and paying off the debt sooner?
Vegas Baby!! 10th Anniversary. And bank whats left over.
I blew mine on crack. Would that be a necessity or a luxury good? I'm thinking necessity, cause I needs it.
Refund?
Usually, my family averages $2500 back on the fed return. This year (thanks to the loss of a deduction AND the fact my wife was drawing unemployment), we will receive $500 back.
Oh wait, I forgot the $50 we paid the preparer and the $450 we owe on our state taxes. Make that a big fat net of $0.
Looks like an 'imagination vacation' for the family this year.
I paid off my Discover Card, asked for a lower rate. They said, "No." I closed the card.
Good Bye! (Fuckers)
@menty666: If you think the country is circling the drain, then surely you're holding gold and not cash.
My husband and I used ours to pay off a no interest until 2010 account we bought carpet for our new house on and buy a base model John Deere riding lawn mower. We needed the carpet because what the previous owner had was 10 years old and reeked of cigarette smoke and this is our first place with a yard (a 1 acre yard at that) so we also thus needed the mower. I've push mowed an acre lot with a self-propelled mower before and its not fun!
I paid off some debts with my tax refund. I bought a new TV back in November, after Thanksgiving and before Christmas, with the intent of making menial payments ($100/month) until I got my refund, and then I'd pay off the whole thing. So February came around, I got my refund, paid it off. So, technically, that'd be to pay off debt, but I planned it.
Next year's check though ... should be pushing $10k after this housing credit thing, so I'm going to probably dump that into new appliances for the kitchen.
State refund to be used to pay back my savings delved into to pay federal $ owed.
Propose to the significant other and pay off student debt with the leftovers.
@ClutchDude: Seriously? here? I suck. Oh well. To make this relevant, I filed as soon as I had all my documents, since one of my 1040's never got sent and I had to request it. It was start of March when I filed.
@Magspie: Yes, considering
- You're getting charged interest for every day you're in debt.
- With inflation, a dollar is worth less tomorrow than it's worth today. And if you think of your tax withholdings as a loan you're giving the government, you'll note that the government doesn't pay you interest on that loan.
Whether all that is worth it or not to the taxpayer in question is up for him to decide.
I *used* my tax refund (back in January) to buy an in-dash navigation system for my car. While I did buy a foreign-made system (Kenwood), I bought it from Amazon.com (an American company) and I had it installed locally by a professional (which cost almost half as much as the hardware).
Of course what I'm getting at here is that I am in the lucky and privileged situation of having some disposable income despite the recession. While I have been saving more money recently (and putting off purchases that I might have otherwise made without a thought), I have been thinking more about spending money at local -- or at least American -- businesses.
I hope that others in my situation have been striving to do the same.
@Megan Squier: Oh yeah, we put the carpet on credit because my husband was too squeamish to pull the money from savings. We landed a zero down federally backed mortgage on a house being sold below market (VERY crazy story involving multiple previous offers pulled because of a seller's loony relative) so I tried to convince my husband we had the money but he wouldn't bite. When we realized that he had accidentally over-paid the government he finally decided to pay the thing off in full.
Right now we're on a quest to become debt free before we're forty.
@Scott Fioretta: I hear ya....Look on the bright side. Next year, you'll be able to claim all of that as moving expense for your new job.
The tax refund we got was split: half paid the property taxes and the other half into savings. Didn't keep ANY out to spend. While we're not in debt, we want to build up our savings and maybe take a real vacation this year with the kids.
I don't understand anyone who gets a large tax refund. Unless you have some ginormous unearned income, you should be able to jiggle your withholdings so that it balances your tax due.
Have the extra automatically deducted from your check and deposited someplace to make some money. Even 1% is better than the 0% you get from the Feds.
That being said, I screwed up this year and my refund $$$ go towards a new MacBook Pro. We already have paid off the mortgage, cars, kids education...
Uhhh. What refund? Y'know that stimulus check we got last year? Guess what we paid in this year? Yup almost the same amount we got back last year
(Husband checked the numbers over and over and over...we didn't add the stimulus check in to our income, per the letter from the IRS we got saying not to add it in...)
@pax: I don't think we'll ever be seeing them. Cutting taxes (income) while raising spending doesn't seem like sound economic policy, in fact it sounds like what a lot of people did to get in debt.
Ours is joining the big pot of money that we're using to refinance our home mortgage. If you have the money to do it, this is a great time to refinance.
All of mine is going to getting my car repaired. Worse yet, they're not even 'repairs,' just adjustments made necessary by new inspection standards.
So thank you, state legislature, for penalizing me because I can't afford a brand new car.
I am going to use it to pay the attorney for my bankruptcy. Happy Days!
I plan on spending the money, but only because I haven't had a job since august and need it to pay fucking RENT. =(
Fancy new HVAC. It'll earn me a better return than putting the money in savings would have (and it obviated a need for a new chimney liner). It's a sweet, energy-efficient, rebate-acquiring, tax-credit-obtaining setup that so far is mind-blowing in its superiority to what I used to have. And my new savings gimmick is to move the difference between this year's and last year's power bills into savings each month--very satisfying.
I put $2500 towards the down payment on a new car, and put $700 in my "backpacking around Romania and Bulgaria in 2010" fund.
My wedding next year.
They didn't even having savings as an option?