Lifestyle

Smart Tips for Spending Your Tax Refund

April 13,2018 | Lifestyle

April is a busy month: Easter, Spring Break, Earth Day, the return of baseball, seeking cover from April showers… and, best of all, Tax Day (this year it’s April 17).

 

According to the IRS, the average tax refund in 2017 was $2,763 – no small amount of change. 

 

You can do a lot of things with $2,763, from the practical to the playful.  For instance, on the playful side, $2,763 can buy you about 2,700 candy bars (give or take a few Snickers). Or, if you wanted to be more practical, $2,763 pays for about 25 percent of one semester of in-state tuition at a public university. Every little bit helps, right?

 

Here are some Smart Tips for Spending (or Saving) Your Tax Refund, whether you want to be practical or use your check from Uncle Sam to have some fun. 

 

Be Practical

 

Save It – Don’t Spend It: Personal finance website GoBankingRates.com surveyed 5,000 U.S. adults and asked, “What do you plan on doing with your tax refund?” The number one answer: put the money into savings. In fact, 43 percent of respondents took the practical route and planned to put their refund into savings. If you want to invest your refund, AARP members are eligible for special offers from TD Ameritrade.

 

Spend It On Stuff You Already Bought – Pay Down Your Debt: The second most popular answer for what Americans planned to do with their tax refunds according to GoBankingRates.com? Pay off debt. Thirty-six percent of respondents said their refunds would go toward paying down debt. Interestingly, the survey found that women are more likely than men to put their refunds toward paying off debt (40 percent of women vs. 33 percent of men).

 

Put It Toward College: The costs of attending college can be truly staggering. According to the College Board, the average cost of one year at a public university for an in-state student is more than $20,000. If you’re attending from out of state, it’s more like $34,000 per year. In fact, today, 44 million+ Americans collectively hold more than $1.4 trillion in student debt. 

 

Whether it’s for your children or grandchildren, contributing now to their college funds is a great choice (and one that will be appreciated in the future). 

 

Be Playful

 

You Deserve A Vacation! Of the 5,000 Americans GoBankingRates.com surveyed, only 10 percent said that they would put the money toward vacations. Why not be part of that 10 percent? If you do decide to travel, check out great deals and discounts for AARP members here.

 

Treat Yourself!  Can you believe only 6 percent of the respondents in GoBankingRates.com’s survey said that they would spend their refund money splurging on a luxury purchase? 

 

If you’re among them, we can help – because nobody said you couldn’t save while you splurge. Whether it’s gift cards for any occasion, a special dinner out or a trip to Tanger Outlets to pick up a slick new outfit from stores like Brooks Brothers, Van Heusen or White House Black Market, AARP members are eligible for a range of discounts. 

 

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These articles present general information and are for informational purposes only. They are not a substitute for legal, financial, medical, or other professional advice.

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