As another tax season has come and gone, many Americans are already planning on how they’ll spend their hard-earned tax refunds. From planning family vacations to funding home improvement projects to paying off debt, there are numerous ways one could put their refund to good use. Just out of curiosity, I did a little research on just what the most common ways are for people to spend their tax refunds. Here’s what I found:
According to data from the National Retail Federation, the two most common ways for Americans to use their 2011 tax refunds were putting it into savings (42.1 percent) and using it to pay down debt (41.9 percent).
The third most common way for Americans to spend their tax refunds in 2011 was to use it for everyday expenses (28.7 percent). Following that, 13.2 percent of Americans used their refunds to pay for major purchases, 11.9 percent used it for vacations and 6.7 percent listed “other” for their choice.
Compared to the year prior, more people used their tax refunds to pay for everyday expenses – the share for that segment was 28.8 percent in 2010. The number for people choosing to save their refunds also increased from 40.3 percent in 2010. Less Americans are using their refunds to pay down debt. The figure was 43.9 percent in 2010.
On a related note, it has been estimated that the average American purchases nearly $2,600 worth of goods and services every month and the average tax refund amount in 2012 was $2,803 – down from 2011’s average of $2,913.
Want a few ideas on how to spend your tax refund? Here’s a look at some of the things Americans love to spend money on, according to info from the U.S. Bureau of Economic Analysis. Some of these figures might surprise you!
Average Monthly Spending for Americans:
- $95.43 – Clothing and Footwear
- $79.97 – Pharmaceutical and Other Medical Products
- $137.63 – Groceries
- $51.90 – Televisions
- $23.44 – Gambling
- $27.63 – Alcoholic Beverages for Home Consumption
- $25.81 – Games, Toys and Hobbies
- $94.45 – Recreation Services
- $130.83 – Purchased Meals and Beverages
- $450.16 – Household Utilities
- $410.48 – Healthcare