Now that we are through with April we are waiting for our annual tax refund check to come in. For some there may not be a refund, for others there may be a small refund, but for many there will be a sizable refund. Let’s look at how most of us are planning to use our refunds.
GO Banking Rates recently surveyed Americans and asked the question – what do you plan on doing with your tax refund?
The results of the survey were interesting. Here is what they plan to do with their money:
- 41% – put it into savings
- 38% – pay off debt
- 11% – go on a vacation
- 5% – make a major purchase (car, home, etc.)
- 5% – splurge on a purchase
Upon seeing the research, The National Association of Realtors (NAR) wondered if this could help with a constant challenge cited by many people who wish to purchase a home – saving for the down payment
In a recent post in NAR’s Economists’ Outlook Blog, they explained:
“With a sizable tax refund, the average American would have a decent down payment depending on which region or market you live in”.
“Approximately 5% of all respondents indicated they would make a major purchase which does not seem like a lot. However, there is a bigger group 41% who see saving the tax return is best and that group could be potential homebuyers if they are not already”.
In other words, putting that money towards purchasing a home is a form of savings. Real estate agents pay close attention to how consumers are spending their money. So, when one considers that first-time homebuyers in 2016 had an average down payment of 6%, a decent tax return could go a long way toward the necessary funds needed for a down payment on a house. Or perhaps, the down payment needed by a son or daughter to make their homeownership dream a reality.
So, how are you going to spend your refund?