Tax refunds: More saving and splurging

Most tax refund checks are going straight into savingsRyan Evans is spending his refund on a getaway to Maine. To see what other are spending their money on, click here. By Jessica Dickler, staff writer


NEW YORK (CNNMoney) -- Using your refund to pay down debt is so 2007, according to a recent report.

Taxpayers are receiving average refunds of over $3,000 a piece this year, and most are planning to save those dollars rather than paying down debt.

Nearly 43% of consumers said they plan to save their refunds, according to the National Retail Federation's 2011 Tax Returns Consumer Intentions and Actions Survey, marking the fifth straight year of this sentiment.

Meanwhile, the percentage of people who plan to pay down debt fell for the third year in a row to 41.9%. It was the first year since the NRF began tracking consumer intentions that saving outweighed paying down debt.

"Frugal living is in style," said Scott Spiker, CEO of First Command Financial Services, a financial service provider. "We've lived in an over-consumptive society for the last 25 years and now we're at a place were people are preparing for themselves for the long-term and that's a healthy thing."

More people are saving when it comes to tax prep too, 35% of those surveyed said they plan to do their own taxes this year, up from 34% in 2010, according to the NRF. Fewer people plan to use an accountant than in previous years.

"The stereotype of people going out to buy a high-definition television isn't really accurate. Most people will save it, pay off debt or spend it making ends meet," noted Bob Meighan, vice president of TurboTax.

Still, some are indulging in a little retail therapy this year: 13.2% of respondents said they will buy a big-ticket item, up from 12.5% last year and 11% in 2009, according to the NRF. The percentage of people planning a vacation was also higher.

For Ryan Evans and his wife, that's a long weekend in Maine this summer. "I usually save my tax refund, but this year things are going pretty well so I figured my wife and I are due," he said. "Lobster here we come!"

But for Scott Cable, this is the first year he decided not to blow his tax refund. In previous years, "I had a full-time job and I usually pissed away the federal refund on frivolous things," he said.

Since getting laid off last summer, Cable is planning a much more conservative approach. "Considering I haven't worked since July, my entire federal return is going to be stashed under my mattress."  To top of page

 
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.99%4.00%
15 yr fixed3.06%3.10%
5/1 ARM3.20%3.19%
30 yr refi3.99%4.08%
15 yr refi3.07%3.18%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,827.75 12.81 0.07%
Nasdaq 4,787.32 29.07 0.61%
S&P 500 2,072.83 5.80 0.28%
Treasuries 2.23 -0.03 -1.15%
Data as of 11:15pm ET
Company Price Change % Change
Kinder Morgan Inc 42.32 0.00 0.00%
Apple Inc 119.00 0.00 0.00%
Facebook Inc 77.62 1.99 2.63%
Pfizer Inc 31.10 0.00 0.00%
Bank of America Corp... 17.11 0.00 0.00%
Data as of Nov 26

Sections

The European Parliament has voted to break up Google and weaken its dominance across the region. More

Warren called it "hypocritical" for the White House to oppose corporate inversions but nominate a person who has worked in this area. More

Two pilots encountered drones while flying over college football games and another pilot saw one while flying over the Hollywood sign. More

Natalie's Cakes and More has raised $84,000 through GoFundMe after protests trash store. More

Retailers are promising big deals this Black Friday, but are the savings actually worth the shopping mayhem? Test your deal-sniffing skills. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.