With signs of an improving economy, many Americans are now keen to use their tax refunds to treat themselves, or their families, to a major purchase such as a new television or furniture.
According to NRF’s 2011 Tax Returns Consumer Intentions and Actions Survey, conducted by BIGresearch, 13.2 percent of Americans will spend their refund on a big-ticket item, up from 12.5 percent last year.
But with the economy also serving as a reminder that it’s best to be financially prepared for the worst, more people will also put their refunds away for a rainy day (42.1 percent vs. 40.3 percent in 2010).
“Despite the difficult unemployment situation across the country, Americans receiving a tax refund this year seem eager to plough this money back into the economy,” said NRF president and CEO Matthew Shay. “With sales momentum continuing to build, NRF is becoming more bullish about the economic recovery.”
While some will toss frugality out the window, there are still 41.9 percent of consumers planning to pay down debt. Other ways consumers will use their refunds include vacation (11.9 percent), and everyday expenses (29.7 percent).
“Many Americans have spent the last few years paying down debt with their tax refunds, but for some, it’s the perfect time to buy something nice for a change,” said Phil Rist, executive vice president, strategic initiatives, BIGresearch. “Others are also looking to the future though, by putting their ‘free money’ in a savings account, with the recession serving as a perfect reminder of the need to be prepared.”
Two-thirds (66.2 percent) of tax payers are expecting a refund this year, up from 65.5 percent last year, but down from the percentage expecting a refund in 2009 (68.4 percent).
