BUSINESS + ECONOMY

Should you spend or save your tax refund?

Mar 27, 2024, 3:00 PM | Updated: Apr 12, 2024, 4:05 pm

1040 form shown, tax refund season is here...

FILE - The Internal Revenue Service 1040 tax form for 2022 is seen on April 17, 2023. (AP Photo/Jon Elswick, File)

(AP Photo/Jon Elswick, File)

SALT LAKE CITY — As the deadline to file your taxes inches closer, you may be wondering what to do with your tax refund.

A recent survey from Bankrate found that 28% of respondents expecting a tax refund planned to use it to boost their savings.

Savings or debt repayments?

Senior Industry Analyst for Bankrate Ted Rossman told Dave and Dujanovic that many people are using their refunds practically this year.

Bankrate’s survey also found that 19% of respondents expecting tax refunds would use them toward their debts.

Related: Unclaimed tax refunds from 2020 are about to expire. Is one of them yours?

Rossman said the results surprised him because fewer people were using their refunds towards their debts than in years past.

“We’ve been doing similar research since 2015. This year actually marked the lowest figure we’ve ever found for debt payoff,” Rossman said.

That low figure also comes at a time of high credit card balances.

“It’s kind of surprising because credit card balances are at record highs. They’re up almost 50% in the past three years. Credit card rates are at record highs, the average is 20.75%,” Rossman said.

Related: Would you tap into retirement savings to buy a home?

Though he expected debt repayment to take priority over savings, Rossman said he understands why people chose one over the other.

“I think for a lot of people though, savings is the other side of that same coin because if you don’t have savings then the next unexpected expense pushes you into credit card debt or maybe deeper into credit card debt.”

Rossman added that unexpected expenses like medical bills are a major cause of credit card debt.

What to spend your tax refund on

If you’re unsure about what to do with your refund, Rossman said you can get the best of both worlds.

Putting some of your refund toward debt and another portion toward savings may be the best approach.

It doesn’t have to be all work and no play though, according to Rossman.

He suggested setting aside a smaller part of your refund to use as “fun money.” The majority of it, however, should go toward practical things like savings or debt repayment.

“We want to use most of it responsibly. But if you want to treat yourself a little bit that could be healthy too,” Rossman said.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Business + Economy

An NYU study shows that people with volatile work schedules are more likely to have health concerns...

Emma Keddington

Volatile work schedules linked to burnout and health problems

A new study finds that volatile work schedules causes burnout and is detrimental to overall health.

4 minutes ago

Signs are posted for the 2024 Sundance Film Festival on Main Street in Park City on Thursday, Jan. ...

Collin Leonard, KSL.com

Sundance Institute seeks proposals for future location of film festival

The institute is asking for formal proposals in an initial information-gathering period.

5 hours ago

alaska airlines flights...

KSL NewsRadio staff

FAA briefly grounds all Alaska Airlines flights, stop now lifted

The Federal Aviation Administration issued a nationwide ground stop for Alaska Airlines without giving a reason on Wednesday.

8 hours ago

Childcare unaffordable...

Eric Cabrera

Unaffordable childcare plagues Utah families

Childcare in Utah is becoming unaffordable for many Utah parents as costs for care are outpacing inflation.

10 hours ago

Disneyland expansion...

AMY TAXIN Associated Press

Southern California city council gives a key approval for Disneyland expansion plan

It would be the biggest expansion of Disney's Southern California theme parks in decades, aiming to create more immersive experiences for guests.

10 hours ago

two skiers shown, ski industry in utah has a big economic impact...

Sam Herrera

LISTEN: How the ski industry in Utah impacts the state

Anyone in Utah knows how big the ski industry is, but do they know what it means for the state's economy?

1 day ago

Sponsored Articles

a person dressed up as a nordic viking in a dragon boat resembling the bear lake monster...

Bear Lake Convention and Visitors Bureau

The Legend of the Bear Lake Monster

The Bear Lake monster has captivated people in the region for centuries, with tales that range from the believable to the bizarre.

...

Live Nation Concerts

All the artists coming to Utah First Credit Union Amphitheatre (formerly USANA Amp) this summer

Summer concerts are more than just entertainment; they’re a celebration of life, love, and connection.

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Should you spend or save your tax refund?