I don’t think you should go into full debt-elimination mode until you have some sort of financial cushion for emergencies.
EL SEGUNDO, CA (PRWEB) March 22, 2013
According to a March 2013 article in TIME, the two thirds of taxpayers who will receive a refund this year will get an average of $2,800. What do they plan to do with this sizable chunk of change? Unfortunately, 30 percent plan to use their tax return to pay for everyday expenses, finds a survey from National Retail Federation. This number is up from 29% in 2012.
Most taxpayers, however, will be using their tax return money to get ahead in their finances, finds GoBankingRates. Of those receiving refunds, 37% plan to use their money to pay down debt, and 44% will be stashing extra funds in their savings account. GoBankingRates investigates the pros and cons of each option, and provides taxpayers with a guide to deciding how tax refunds should be used, depending on their financial situation.
GoBankingRates expert contributor Elle Martinez says, “How can you use your tax refund to build your finances? Paying off debt can be like lifting a huge weight off of your shoulders.” However, she advises, “I don’t think you should go into full debt-elimination mode until you have some sort of financial cushion for emergencies.”
GoBankingRates.com is a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools. GoBankingRates collects interest rate information from more than 4,000 U.S. banks and credit unions, making it the only online rates aggregator with the ability to provide the most comprehensive and authentic local interest rate information.
For questions about this report or to schedule an interview with a GoBankingRates editor, please use the contact information below.
Jaime Catmull, Director of Public Relations
- TIME, Why We’re So Irrational When It Comes to Tax Refunds, March 18, 2013.
- National Retail Federation, “More Americans Serious About Saving Tax Returns This Year, According to NRF Survey,” February 22, 2012.
- National Retail Federation, “Seven in 10 Americans Adjusting Spending Plans to Cope With Recent Payroll Tax Changes, According to NRF,” February 21, 2013.