(Daniel Acker/Bloomberg News)By Becky Yerak
| Only 7 percent of Americans plan to blow their tax refunds on “fun” activities like shopping or vacationing, while 84 percent say they plan to use it to repay debt, save, invest or use it for everyday necessities, according to a Bankrate.com study released Monday.
Of that 84 percent, 30 percent will repay debt, 28 percent will save or invest, and 26 percent will put the money toward food or utility bills.
Only 19 percent of Americans plan to adjust their paycheck withholding
to avoid a big refund next year, while 71 percent will keep their
withholding the same.
“Padding emergency savings, establishing or boosting an IRA, and paying
down high interest rate debt are all great uses,” Greg McBride,
Bankrate.com senior financial analyst, said in a statement. “But go one
step further and adjust your paycheck withholding so you’re not giving
an interest-free loan to the government in 2010 also.”
To see the complete set of data, click here.
Sure, for those GETTING a refund…
I keep hearing so-called experts constantly advising against giving uncle Sam an interest free loan. However, I never hear them advise against underwitholding to avoid penalties! If I could come even close to knowing ahead of time what my tax bill would be, I would be in great shape! Otherwise, I’m going to err on the side of the interest free (what 28 cents??) loan. At least it doesn’t cost me in penalties.
I agree Robert.