JENKS, Okla. — Changes to the tax code mean bigger refunds for many Americans, but a new survey shows a shift in how people plan to spend their money. Instead of saving, more taxpayers are using refunds to pay off bills and debt.
RetailMeNot recently conducted a survey highlighting this change in consumer behavior.
"72% of Americans expect a tax refund this year, and that part is pretty consistent with what we have seen before, but what has changed is really where that money is going. Last year, the top use of refunds - for savings - but this year we are seeing that it's for bills and debt," Stephanie Carls said.
Carls, a retail insights expert for RetailMeNot, noted that paying off credit cards is a primary focus for many.
With the deadline to file taxes April 15, Mark Marshall mulled over what to do if he gets a refund while taking a break from showing his Aunt Penny around Jenks.
"If I get a tax refund, obviously when you get more money, you wanna go spend and get something but obviously my bills -- I'll see if I can, you know, pay off some credit. Put a little bit aside, obviously, because you never know what's gonna come up," Marshall said.
Financial experts recommend making a plan for the money before the refund hits a bank account to avoid frittering it away.
"I agree with that," Marshall said.
While debt is the top priority, the survey found some people still plan to use the extra money in other ways.
"17% of people still plan to invest, 17% are saying they plan to travel. You have 13% that are still saying they're treating themselves," Carls said.
While Mindi Salvino is not anticipating a refunds, if she gets one she plans to invest it as a hedge against financial bumps in the road.
"I think that right now it's kind of uncertain. So, people are trying to get ahead as much as they can and prepare, not really knowing what the economy is gonna do," Salvino said.
Experts add putting a portion of a tax refund into an emergency account is also a good idea to create a cushion for unexpected expenses.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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