We are in the height of tax season my friends. Did you know a majority of Americans will be getting a refund this year. Now, the amount varies, but averaging in the $3,000 – $4,000 range. Not too shabby. While I would say that’s cool, when you get a refund of that amount, it just means you overpaid in taxes. You just gave Uncle Sam an interest-free loan to use as they please. They are just paying you back when it’s time for tax refunds. I try to get mine as close to zero as possible. Unfortunately, this year I failed. I owe the IRS quite a bit of money. I was expecting it due to some stock sale proceeds and my business doing above expectations. I don’t mind paying my part at all, so it’s a good problem to have.
Since there is a little under a month left before you need to have your taxes filed, I figured I would provide a little infographic on what most Americans spend their tax refunds on. I am not surprised by this list, but maybe someone is. As a person who will be paying the government more, I know that I won’t be getting a refund. I won’t be a part of the 66% of tax payers getting that big check this year. If it were me and I had a refund coming, I would put most of it in my Motif Investing account, then use the rest to help fund our basement renovation. I would rather have my money start using the power of compound interest than just sitting around. Hell if I’m going to spend it on some random things. I want my money to make money!
When putting up any infograhic, I like to make some key points about the data and this one is no different. Here are my key takeaways about how Americans will spend their tax refund.
- Most Will Save – I’m a little surprised by this to be honest. While I would save the money, most Americans don’t save money at all or not nearly enough. Why would the tax refund be any different. I actually feel more people will pay down debt or spend it.
- Strange Percentages – I used this infographic because I liked to see how people were spending their money. What are they using their tax refund for. The issue with this one is they use percentages that don’t seem to add up correctly. When you have a circle graph, it should only add up to 100%. This one goes to 149.2%. Are people spending money on extra credit? Not sure I get it, but just liked the overall categories.
- More Vacations than Splurge Purchases – Now, after we get passed the wonky math here, I think it’s good that people are using their tax refunds for some vacation time. Many people don’t take vacations because they can’t afford them. Why not use a little dough from your tax return to enjoy some time away. I think it’s better used than a random splurge purchase.
- Women Plan to Save and Spend More – Not sure how to take this one, but women will be using their tax refunds more toward saving and spending. They will save more than men, pay off more debt, and spend more. That’s craziness!