Will you save or spend your tax refund?

What are you going to do with your tax refund?

Forty-two percent of those surveyed said they will save at least part of their refund, which is expected to average about $3,000, writes Palm Beach Post reporter Laura Green.

And of those who are spending, the biggest segments plan to pay off debt (41.9 percent) or cover everyday expenses (29.7 percent), Green reports, citing a study by the National Retail Federation.

“The bad news is the recession has greatly affected people,” MassMutual financial adviser Alfred Hovis told Green. “The good news is it’s woken up a lot of folks to understanding that they have to be more self-reliant.”

Financial advisers are starting to believe that the trend of the past few years, when more Americans plowed refunds into a retirement or an emergency account, could signal a more lasting shift, Green writes.

Are they right or wrong? What do you plan to do and why?

- Henry Unger, The Biz Beat

For instant updates, follow me on Twitter.

107 comments Add your comment

dp

March 23rd, 2011
8:01 am

Gonna probably have to spend it on my power bill after hearing about the case against Cobbs EMC’s Brown being dropped. I figure that ole Roy Barnes is gonna get Brown to pay him a 8 figure sum, which of course, us Cobb EMC ratepayers will get tagged with. Hey Roy, I thought you always claimed that you were for the consumer & the little guy…oh, yeah…right! And if anyone believes ole Roy didn’t use his Associate to intentionally get that Indictment tossed, well I guess you believe that Barry Bonds really did think he was injecting Flax Seed into his rump with that needle!

fair tax

March 23rd, 2011
8:10 am

Average refund is $3,000? That’s $250 more per month that people could have used throughout the year. Why let the governement have that money all year interest free? Adjust your withholdings.

JJ

March 23rd, 2011
8:30 am

No, I’m not going to adjust my withholdings. I like getting money back every year. I’ve learned how to live within my means. I don’t have any credit cards, and everything is paid for with cash. The only thing I finance is my mortgage.

This year, my tax refund went to a rebuilt transmission for my 13 year old car, with 173K miles on it.

Cyndi

March 23rd, 2011
8:34 am

Work 2 jobs–get back $115 from the Feds, owe $60 to the state. Leaves me with $55 after that. A tank of gas and maybe a Happy Meal at Mickey D’s. Fun times!!!

Average Joe

March 23rd, 2011
8:36 am

No refund for me. I’ll be mailing a $192 check to the IRS on 4/15. I owe the state a little money, too.

Refund Baby!

March 23rd, 2011
8:39 am

Spend spend spend! Since we have everything we need, we’re going on a vacation, eat out at restaurants every night, and buy fancy do-dads to put on our bookshelves.

jess

March 23rd, 2011
8:40 am

because i’m a multi-billionaire I’m getting fourteen million dollars in my refund. recently been thinking i want to spend my refund buying a few more politicians, if i accumulate suffucient quantity, they’ll give me everything else i want.

Piggy Bank

March 23rd, 2011
8:40 am

What refund, withholding cut on both workers to 1 and I still owe money even with a good mortgage deduction. All I do is pay taxes…

Piggy Bank

March 23rd, 2011
8:42 am

Nathan Deal pays 2K in taxes and I pay about 28k, his income was reported as about the same as my families…I must be checking the wrong boxes are something. please give us a fair tax!

Gig

March 23rd, 2011
8:46 am

Thankfully, I have no debt other than my mortgage, drive a seven-year-old car that was paid for five years ago, have good health, and live within my means. I like getting a large tax return back. Usually that money goes into my long-term savings account. I’ve been unemployed before, and it was nice knowing that I would have that money available if I needed it. However, this year, I decided to splurge, and I’m getting new granite countertops.

Standing in an 8 hour line for the iPad 2

March 23rd, 2011
8:47 am

I’m buying another iPad for my wife!

Pray

March 23rd, 2011
9:04 am

I put it all in savings to go towards purchasing a new house!

Diana

March 23rd, 2011
9:10 am

Used it to finish paying off $3,000 on energy efficient windows purchased last year. Now no more debt except mortgage. Treated ourselves to a paint job on the den and put the rest ($10,000) in our savings accounts.

N

March 23rd, 2011
9:18 am

No big refund here. The $3,000 avg amazes me but I am sure the 50% that don’t pay any taxes and thus get large refunds push that average up to that level. I’ve never seen a refund that large but my refunds usually go into savings or to pay off something.

Sure is a lot of money to loan the government but if it works for people and they feel good about it and getting the refund each year, go for it.

Mike

March 23rd, 2011
9:18 am

Use it to buy more lottery tickets in hopes of winning back what I lost when my 401k tanked!

N

March 23rd, 2011
9:20 am

Mike – Funny post. hasn’t your 401k recovered by now. Have yet to meet anyone who has come out ahead playing the lottery.

Techmom

March 23rd, 2011
9:22 am

$10,000 refund?

@PiggyBank, I’m with you. I feel like I missed the memo on how to pay so little in taxes. We pay enough to support a family of 4 ABOVE the poverty line. I’ve got to be doing something wrong (and no, we’re NOT rich by any means).

eye roll

March 23rd, 2011
9:22 am

I have always been facinated at the shear number of multi-millionaires that love to come on blogs and tell everyone how much money that they have. Now we have a multi-billionaire. WOW – Atlanta is full of wealthy folks!

No refund here, having to fork over some cash to Fed & GA. Being stuck in the land of alternative minimum really stinks. Enjoy your tax refund folks!

Typical Redneck

March 23rd, 2011
9:23 am

Jess, wealth envy?

DJ SuperStar

March 23rd, 2011
9:30 am

Got very minimum federal refund. Might be able to get a tank of gas with that. For the state refund, it paid partly for the paint job for the house I have for sale on the market. That’s it. All refund money gone!

timthebrave

March 23rd, 2011
9:37 am

Paid off all my credit card debt and went on a cruise to the bahamas

Refund Baby!

March 23rd, 2011
9:41 am

N – get a clue. Those who “don’t pay any taxes” don’t get a refund. Those who get a refund have PAID TAXES ALL YEAR LONG and just overpaid. It’s about time the ignorant common folks out there realize that tax paying doesn’t just occur this time of year – it happens every time you get a paycheck!

eye roll

March 23rd, 2011
9:47 am

@ fair tax & N

Adjusting your withholdings is a crap shoot. There are many of us that have tried for years to play that game and it doesn’t always work out they way you think. However, I am with you fair tax, I wish the government would stop it obsession with my income – that would solve my problems!

grizzybear

March 23rd, 2011
9:49 am

the fairtax is nothing but a pipe dream, so get over it. it will never have enough sponsors!

Techmom

March 23rd, 2011
9:56 am

@Refund Baby! Guess you’ve never heard of Earned Income Credit? There are plenty of people who get a big fat refund of not only all the money they have paid in (very little) but also more.

Ghost of Leona Helmsley

March 23rd, 2011
9:57 am

Only the little people pay taxes.

Shelby

March 23rd, 2011
9:57 am

Saved !0% and the rest when to Sears and Lowes for yard equipment!

David B.

March 23rd, 2011
9:58 am

Since my dentist informed me I need a crown and a root canal, look’s like he’ll be getting it instead of me getting a much needed vacation. Maybe I could do both and get it done in Mexico instead…

Peadawg

March 23rd, 2011
9:59 am

Pay of the credit card and save the rest.

andrea

March 23rd, 2011
10:00 am

Refund baby- you are not correct. People that have not paid taxes all year still gets a refund. Its called a EIC for children. Sadly, my friend has been unable to work all year do to not having a babysitter/daycare. She worked a month last year and has 2 children. Shes getting back over 4000. JUst for having children and getting foostamps. MAkes me mad, but nothing can be done. Its the Fed. GOv.

GAPeach

March 23rd, 2011
10:01 am

Half going on braces for my daughter, the other half going in the bank.

eye roll

March 23rd, 2011
10:02 am

“the fairtax is nothing but a pipe dream, so get over it. it will never have enough sponsors”

Aww, grizzybear has a nasty ‘tude toward the fair tax. Wonder why? :)

Refund Baby!

March 23rd, 2011
10:15 am

Andrea – your friend makes me livid – why does she have kids if she can’t afford them? Where’s the father?

Native Atlantan

March 23rd, 2011
10:19 am

Still can’t figure out how to adjust witholdings enough to not loan the Feds some money at 0% interest…and still can’t understand how some of you don’t have a problrm loaning the government your money at 0% interest…We’re getting about $5,000 back from Fed/State together. Might treat ourselves to an iPad. The bulk of it will go towards some unexpected medical bills this year and into savings.

RK

March 23rd, 2011
10:20 am

What will I do? I had it back weeks ago — why wait? It’s a new car now.

N

March 23rd, 2011
10:23 am

Andrea — Great point. I am all for helping those that need a little help to get started but having 50% of people pay no taxes at all and many of those getting huge refunds due to these credits boggles the mind. Its incentive for some to have kids and not do anything productive, probably not the best environment to raise the next generation in.

KnightInATL

March 23rd, 2011
10:26 am

Mine is going towards the purchase of a Harley Davidson Night Rod Special.

andrea

March 23rd, 2011
10:27 am

the father, he’s around. He pays her 700 a month for child support. She doesnt have to claim child support for taxes and as loing as she is under 1300 a month cash, she gets 540.00 in food stamps. Plus 4000 in EIC a year. I blame the Gov for people like her and she knows it makes me sick, but its legal and as long as the gov allows it, people will do it! THey need to put a limit on food stamps. She blames the state for her troubles, as she would put it, ” no one wants a single, black, and no degree person working for them”. She thinks there needs to be more programs for minorities and single mothers. ONce again, I’m not happy with her, but it is legal.

Moe Szyslak

March 23rd, 2011
10:27 am

My state and federal refunds only totaled about $500 but I deposited them into my checking account, which is where my income gets deposited. I use that account to pay bills and then I move the excess to a savings account each month (sometimes twice a month).

So, chances are that it will ultimately end up in savings b/c I really didn’t need it to pay bills. My income covers that pretty easily.

Also, I sometimes spend my income on fancy store bought dirt.

Molly

March 23rd, 2011
10:36 am

ummm…$500 that’s all! It’s gonna be a quick shopping spree.

hd

March 23rd, 2011
10:39 am

What refund? No interest free loans from me.

CHUCK

March 23rd, 2011
10:39 am

I had to pay 2000 …

typical Joe Blow in Atlanta

March 23rd, 2011
10:41 am

My wife wants a new BMW, so that’s what my refund will be going towards. She’s playing tennis today with some of the other ladies in the neighborhood. I’m at work.

Sam

March 23rd, 2011
10:41 am

Our tax refund was due to tuition credits. We are therefore saving to pay future tuition. No school loans or debt for us.

Refund Baby!

March 23rd, 2011
10:41 am

I had 2 single black no-degree females working for me in the kitchen of my restaurant. They did great jobs. One was promoted to front of the house. Got to start somewhere!

TnGelding

March 23rd, 2011
10:42 am

Let’s hope they’re right and we have learned a hard lesson.

Normally we don’t pay any tax or get a refund, but this year we are. I’m going to invest it on the Blackjack table and hope to own the casino in a couple of hours of divine intervention.

CHUCK

March 23rd, 2011
10:43 am

How can you get money back wthout having a job? isnt’ a refund just money that you already paid to govt that they are givng back.
EIC is just a credit.

tl

March 23rd, 2011
10:44 am

Andrea, If she’s like most, she sells or trades those food stamps too!

TnGelding

March 23rd, 2011
10:44 am

I understand your logic, but I guess you folks would rather we be paying interest to the governments of China and Japan.

Lilburngal

March 23rd, 2011
10:44 am

Had enough to get a new kitchen floor and to donate to church.