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

FILE - U.S. President Donald Trump, left, and Canadian Prime Minister Justin Trudeau talk prior to ...

Mariah Maynes

How will Trump tariffs impact consumers? It depends, but here are estimates

Economists agree that Trump tariffs could have consequences for the economy and American wallets.

1 day ago

The Food Justice Coalition cleared its calendar on Monday to support the nationwide protest of Pres...

Shelby Lofton, KSL TV

Salt Lake businesses, organizations feel impact of ‘Day Without Immigrants’ closures

Businesses cleared their calendars to support the nationwide protest of President Trump’s crackdown on undocumented immigrants in the country.

2 days ago

This image shows a chicken coop and garden at the home of Sarah Penny in Knoxville, Tenn., in May 2...

Associated Press

Soaring egg prices are piquing interest in backyard chickens

Thinking about backyard chickens as egg prices soar? Think hard, especially in light of the bird flu outbreak.

2 days ago

FILE – U.S. agriculture could be impacted heavily during a trade war, as it did in 2018-19. (KSL ...

MIKE ANDERSON

Economist: Effects of 2018-19 trade war still linger, shows what to expect from another trade war with China

Though many of us might have forgotten about it, the impacts of a trade war with China in 2018 and 2019 still linger in Utah.

2 days ago

A cashier counts cash at Thread at City Creek Center in Salt Lake City on Friday, Nov. 24, 2023. Ut...

Adam Small

New tariffs will impact Utah businesses and consumers, local trade experts say

For example, if a Utah business manufactures a good in a country with a 25% tariff, it'll pay 25% more to bring that product back to the U.S.

3 days ago

President Donald Trump speaks to reporters next to Air Force One after arriving back at Joint Base ...

Josh Boak and Christopher Sherman, Associated Press

Trump agrees to pause tariffs on Mexico, but import taxes still in place for Canada and China

President Trump temporarily pauses tariffs for one month after talking with Mexico's president.

3 days ago

Sponsored Articles

Full speed through the snow. A man on skis is pulled by his through the snow at full gallop Skijori...

Bear Lake Convention and Visitors Bureau

Get ready for an unforgettable skijoring adventure in Bear Lake!

“Skijoring the Bear” takes place this year on February 21-22 in Garden City, Utah.

the bedroom in a geodesic dome shows the night sky...

Clear Sky Resorts Bryce Canyon

Your front row to an extraordinary cosmos show

As America's first glass dome stargazing resort, Clear Sky Resorts Bryce Canyon is one of the world’s most unique and spectacular places to stay.

2 people huddled up in a blanket and warm clothes sipping hot chocolate...

Bear Lake Convention & Visitors Bureau

The best ways to spend your Christmas vacation in Bear Lake

If you're dreaming of a white Christmas this year, Bear Lake should definitely be on your radar. Read this guide for more!

big crowd of people under holiday lights in an outdoor market...

Western Nut

Our favorite family Christmas activities in Utah

We gathered up a list of our favorite activities, movies, and treats to try this holiday season that the whole family can enjoy.

an IT tech looks at a laptop in front of a server network...

Comcast Business

Tips to protect yourself from phishing attacks

Check out this resource from Comcast Business to learn more about phishing attacks and how to protect yourself from becoming a victim of one.

A surprise gift, wrapped and ready to bring holiday cheer! Whether for Christmas, a birthday, or an...

Western Nut

10 Holiday Gift Ideas to cover everyone on your list

This guide is for you if you need holiday gift ideas that will make a lasting impression. 

Should you spend or save your tax refund?