Why Aren’t People Spending Their Tax Refunds?

Economists, politicians and people in general like to discuss the nation’s economy and where it stands at any given moment. There are many different points that are touched on and several aspects that are used as evidence to make important points. However, one indicator of the economy’s health that can never really be argued is consumer spending.

When spending is up the economy improves, as does the nation’s overall outlook. However, when spending is down, the economy slows and the outlook gets darker. To that end, what does it say about the economy that a lot of people are putting their 2015 tax refunds in the bank, instead of splurging on frills? It means consumers are still exercising caution and taking a wait-and-see approach.

According to the numbers, even though the average tax refund has been up 0.7 percent in 2015, about half of all taxpayers said they planned to save at least some of their refund money this year. That means they are going to be spending less. In fact, that percentage is as high as it’s been since the National Retail Association started conducting its survey 12 years ago.

Many other consumers, almost 40 percent, also said they are planning to pay off some debt when they get their refund check this year. In a separate survey by BankRate.com only 3 percent said they planned to spend all of their refund and 67 percent said they were going to use it to pay off debt.

So, while the news is good that taxpayers are getting a little more back this year, the news for the economy might not be as promising At any rate, with more money being returned to consumers, at some point it should make it back in to the economy. That means even though the boost might not come now, it could still come later.

Posted in
Matt Schultz

High Tech Leadership | Matt Schultz

  About Matt Schultz Matt Schultz serves as the current President of the Silicon Valley Chapter of the BYU Management Society (BYUMS). The BYUMS is a global organization that provides opportunities for local professionals to build their network and develop themselves professionally and personally. Matt, originally from Seattle, completed his schooling at BYU, earning an…

The Value of Investing | Elaina Serotte

  About Elaina Serotte Elaina began her career in 1999 at Morgan Stanley as a sales assistant in the Global High Yield Bond department in New York. In 2002, Elaina moved to MassMutual Financial Group in San Francisco as a Senior Financial Planner. She built her private client group from the ground up, serving over…

Greg Pickett; Real Estate for Startups

Real Estate for Startups | Greg Pickett

  About Greg Pickett Utilizing his background in real estate finance and his skills in the areas of communications and analysis, Greg Pickett represents the interests of corporate clients and their real estate needs. Greg specializes in representing tenants in the leasing and disposition of property on the Peninsula and Silicon Valley. Greg has represented…

Jukko – Meaningful Engagement on Mobile | Elizabeth Sarquis

  About Elizabeth Sarquis Elizabeth Sarquis is the founder and CEO of Jukko, the first ever mobile discovery platform designed to foster positive social impact. She is also the CEO and founder of Global Gaming Initiative. Elizabeth has worked extensively with United Way, the National Eating Disorders Association, Park Nicollet Health Services, and others to…