According to a survey by American Consumer Credit Counseling, Americans were a bit more financially responsible this tax season than in past years. This year only 16% of American consumers reported blowing their tax refunds on frivolous items. The majority of respondents (69%)used their tax refunds to pay on outstanding debt and to get ahead on monthly bills like the rent, loans, and car payments.
Of the 179 respondents interviewed, 14% did not receive a refund, 11% owed the government money. Out of the respondents who owed money, the majority (19%) owed less than $499. This is somewhat encouraging news for ACCC President and CEO Steven Trumble. “The worst thing a consumer can do is get themselves into debt with an overwhelming tax bill. In most circumstances, the IRS will work with you to set up a payment plan to tackle the debt head-on. Once the debt is paid off, start setting aside money from each paycheck to plan for next year’s bill.”
Of the respondents who received refunds, 20% saw a return of over $2,500. The IRS reports an increase in refund rates for taxpayers in general (1.5%). Participants between the ages of 35 and 44 years old received the highest returns
Trumblesays, “It’s encouraging that so many consumers are making smart decisions with their money by opting to pay down credit cards and catch up on bills rather than dig themselves deeper into debt.It’s very easy to look at a tax refund as free money, but the reality is, the refund check you receive from Uncle Sam is just a return of your own hard earned money.”
The survey may be an indicator that Americans have become more committed to being fiscally responsible in the wake of the recession. Surprisingly ACCC’s web report on ConsumerCredit.com revealed 37% of 18-34 year olds reported putting their refund checks in their savings account, while only 28% reported spending their refunds. Interestingly, when asked if they believed the amount of taxes they paid was fair, 46% of respondents said they thought the amount of taxes they paid was fair.
This is the latest ACCC poll survey in a series that focuses on budgeting, financial education, financial planning, and other financial issues. The organization hopes that these annual web surveys will raise awareness among American consumers about the importance of financial planning and financial health. The results of the poll are encouraging, as it implies that young Americans may be making more financially sound decisions with their money.
Blair Thomas and he is an electronic payment expert and the co-founder of eMerchantBroker.com from Los Angeles, CA, the best collection agency merchant account in the U.S. He enjoys hiking, dining and discovering new music. When he is not working in the electronic payments industry, you can most likely find him producing and writing music. Add him to your circles at Google +
