Tax refunds are used for bills, healthcare, and – yes – having some fun!
Last month, we talked about how Savers used their 2017 tax refunds. This month, we’re diving deeper into how saving and spending changed after Savers got their refunds.
Refunds are used to play catch-up
In the months leading up to tax season, many people have to put off bills or delay healthcare. We learned that Savers used their refunds to cover those delayed expenses, like medical bills, government expenses (like renewing a DMV license or paying a parking ticket), credit card payments, and utilities.
Here’s how people’s spending changed in February (after receiving tax refunds) compared to the prior three months.
One Saver named Sanjay told us that his tax refund “helped me clear a major chunk of my credit card debt.”
Refunds allow people to enjoy some well-earned fun
Savers also used their refunds to have fun! For some, this was going to the movies or a museum; for others, this was investing in their health with a gym membership.
It’s important to put some of your money toward things that you enjoy and that are meaningful to you. And even though discretionary spending increased in February, it still accounts for only around 1% of spending.
People are also saving their refunds!
People who received a tax refund in February increased the amount of money they transferred to a savings account by 191%.
On average, this comes out to $1,296 saved per person, meaning that people are saving almost half of their refunds. Way to go, Savers!