Millenials Put Saving Ahead of Splurging in Tax Season

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It’s tax season again, and with less than a month left to file, you may be among the nearly 30% of Americans who have yet to have their self-control tested as their returns ($3,120 on average in 2015) arrive in their bank accounts.2

There are a few things to consider before you receive your small lump sum. First, think about when and how you’ll file.

According to a survey conducted in early February by the National Retail Federation and commissioned by Prosper Insights and Analytics, 22.1% of adults had already filed their returns with another 38% planning to file by the end of the month.1

Plan on doing your taxes yourself? You’re far from alone. More than half (52%) of Americans plan to prepare their taxes themselves, with 38% doing so using computer software (yes, some still prefer hand preparation).

But what to do with these funds? Hint: A new flat screen probably isn’t the answer.

According to the aforementioned NFR survey, more than 80% of adults plan to use their tax returns for either paying down debt or adding to savings.1

Interestingly, it’s America’s youngest group of taxpayers, ages 18 – 24, who are most likely to make responsible decisions with their returns: Just under 90% of the group plan to either pay down debt or save their returns.2

Surveys also shed light on less responsible tax return decisions. According to the same study, less than 13% of millennials plan to spend their returns on splurging or major purchases. An H&R Block/Neilsen survey has the percentage even lower at 11%.3

While saving and paying down debt are the most popular refund decisions, here are two alternatives that may help you save and make more money:4

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Home Efficiency

Ensuring home efficiency can be a gift that keeps gving. A new thermostat here or extra insulation there can help save money on heating, cooling and electrical bills all year long. In addition, a home energy audit can help you identify areas where you can save the most.

 

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Invest In Your Career

It’s undoubtedly easier to save money when you’re making more of it. Prepare yourself for a promotion or new position by continuing your education. Pursuing an additional degree or job related certification can be a great way make your tax refund pay off down the line.

 

 

References:

1Prosper. (February 7, 2016). National Retail Federation’s annual tax returns survey. Retrieved March 18, 2016, from https://nrf.com/sites/default/files/Tax Returns press.pdf

2Kirkham, E. (February 22, 2016). This is the no. 1 thing Americans do with their tax refund. Retrieved March 18, 2016, from http://www.gobankingrates.com/personal-finance/first-thing-americans-do-tax-refund/

3H&R Block. (April 9, 2015). How people are spending their tax refunds. Retrieved March 18, 2016, from http://newsroom.hrblock.com/people-spending-tax-refunds

4Discover. (March 7, 2016). 7 smart ways to spend your tax return. Retrieved March 21, 2016, from https://www.discover.com/credit-cards/resources/family-personal-finance/seven-smart-ways-to-use-your-tax-refund

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About 

Babs is a content writer at Enova International, Inc. with a Bachelors in Cinema Studies and English from the University of Illinois (ILL-INI!). She loves binge watching musicals, reading in the (sporadic) Chicago sunshine and discovering great new places to eat. Accio, tacos! Find out more about her on Google+.

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