Tax Day is fast approaching, which means that millions of Americans will be receiving a tax refund in the coming weeks.
In 2017, the Internal Revenue Service issued nearly 112 million tax refunds, averaging $2,985 apiece. For most Americans, $3,000 goes a long way with grocery shopping, monthly rent payments, and other recurring expenses.
But how exactly will Americans spend their tax refunds this year? Here are the common themes:
- Of those who expect to receive a tax refund, 43 percent say they’ll put the funds into a savings account—up from 41 percent last year.
- One-third of Americans will use the extra money to pay off credit card debt and other liabilities.
- Just 10 percent of Americans plan to spend it on a vacation, while only five percent will use it for a major purchase of some kind.
Even though roughly one-third of Americans don’t expect a tax refund, you’re most likely going to get one—improving your financial standing. Don’t waste it! There are plenty of ways to take advantage:
1. Pay down credit card debt
2. Shore up an emergency fund
3. Purchase something of value
4. Invest in the stock market
5. Go on a long-overdue vacation
6. Contribute to an IRA or 529 plan
7. Complete your auto maintenance work
8. Save it for holiday gifts
9. Buy groceries in bulk
10. Reduce student loan obligations
And there are many more. When your tax refund hits, be ready to use it wisely!