Nearly Half of Americans Plan to Save This Year’s Tax Refund
April 8, 2022
As Tax Day rapidly approaches, many Americans are receiving their refund checks.
More than 81 million Americans have already filed their taxes and the IRS has sent out a total of $188 billion in refunds, as of March 25. The average refund thus far is $3,263, which is 12% higher than last year, but even though this year’s refund checks have been bigger, fewer Americans plan on actually spending them.
Almost half, 46%, of Americans plan to save their refunds this year, according to a survey from LendingTree. That’s higher than the previous two years: 41% in 2021 and 40% in 2020.
Aside from saving, the most common responses for how taxpayers plan to use their refunds are paying down debt (37%) and covering basic household expenses (22%). Just 8% said they would use the money to splurge on a big purchase they had been putting off, while another 8% said they plan to use their refund to book a vacation.
Analysts from LendingTree posited that the higher percentage of savers was likely due to surging inflation and climbing interest rates.
Surprisingly, the survey found that young Americans were most likely to save their refunds. More than 60% of Generation Z respondents, ages 18 to 25, said they will put their refund check into their savings, compared to 47% of millennials and 41% of boomers. Generation Z was also more likely to invest their refunds, the survey found.