As the economy continues to shrink and jobs continue to vanish, more Americans are planning to save their tax refund rather than spend it this year, a new survey shows.
Seven in 10 Americans (71 percent) plan to save their tax refunds, invest the money or use it to pay off debt, according to the survey released Thursday by ING Direct USA.
“Although Americans are often encouraged to spend their refunds to help stimulate the economy, Americans are choosing to save themselves first,” said Arkadi Kuhlmann, president of the Wilmington, Del., financial services company. “They strongly believe their top priorities are to stimulate their personal finances and keep the lights on at home.”
Debt is weighing heavily on American minds. Nearly half of the respondents polled in the survey (46 percent) plan to use their tax refunds to pay off debt, and one in three (39 percent) plan to pay off that debt this year.
“The last 12 months have been a wake-up call,” said Chris Rivers, a certified financial planner at Armstrong, Fleming & Moore Inc. in the District. “Last year when people got their stimulus checks from President Bush, people went and spent their money. This year, people are taking a more prudent approach to saving, which is a good sign.”
Consumers may be tightening their belts, but they are also feeling generous toward victims of the financial crisis. A survey released earlier this month by Western Union revealed that nearly three-quarters of Americans (74 percent) plan to share their tax refund with a friend or a family member in need.
Over the past six months, the survey found, more than a third of consumers have lent money to a friend or a relative to help them out.
Nearly one in five Americans polled by Western Union said they have asked for financial help from family and friends in the past six months. About half of those surveyed (47 percent) said they would probably accept an offer from a friend or a family member to share their tax refund if needed.
“As tax refunds are arriving in people’s mailboxes, and the economy continues to add to our collective financial burden, we believe these instances of familial giving are going to increase,” said Jorge Consuegra, senior vice president of U.S. product management for Western Union.
The Western Union survey was conducted Feb. 13 to 15 by GFK Roper Public Affairs & Media and polled 1,000 adults age 18 and older.
The ING Direct survey was conducted by Harris Inter-active from March 17 to 19 and polled 2,115 adults age 18 and older.
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