- The average American expects to receive $2,154 from their tax refund this year
- 2 in 5 Americans are relying on their tax refunds to pay off outstanding debt and are concerned about IRS delays impacting their refund, following the recent government shutdown
- Millennials are the most reliant on their tax refunds, with 60% relying on their refund to pay off outstanding debt
- Yet, 67% of millennials admit to having made frivolous refund purchases in past years
- 30% of millennials are planning to make a smartphone purchase using their refund money
- While most Americans plan to put their refunds towards savings (40%) and bills (40%), nearly half expect to splurge at least 25% of their tax refunds on shopping and entertainment
- Top areas of planned spend for Americans include travel (25%), clothing (23%) and electronics (20%)
To uncover how Americans are planning to use their tax returns this year, Decluttr—leading tech buy-back site and refurbished tech seller— surveyed 2,012 Americans, revealing that consumers plan to spend $81B of their tax refunds on shopping, entertainment and other experiences.
|Shopping / Spending Category||% of People Spending in this Category|
|Home and Garden||13%|
|Beauty & Health||12%|
|Books, Movies, Games||10%|
|Toys, Kids and Baby||8%|
|Sports and Outdoors||6%|
How Americans Plan to Allocate Their Tax Refund Dollars
With many Americans (42%) also relying on their tax refunds to pay off outstanding debt, the big question on many minds is how the government shutdown may delay their refunds.
According to the survey, 2 in 5 Americans are concerned about IRS delays. When it comes to the types of bills that are being paid off with refunds, nearly 40% of Americans are planning to apply their refunds toward credit card bills.
|Debt/Bill Category||% of People Spending in this Category|
|Credit card bill||39%|
In addition to paying the bills, 2 in 5 plan to put their tax refunds toward savings, primarily putting it into savings accounts or CDs.
% of People Spending in this Category
Savings accounts or CD’s
|Individual stocks and bonds||16%|
|Mutual funds and ETF’s||11%|
|College savings plan||
Millennial Returns & Spending Plans
As compared to the national population, millennials are the age group most reliant on their tax refunds, with nearly 60% counting on their refund to pay off outstanding debt. Yet, millennials are also more likely to spend portions of their refund on shopping, entertainment and experiences.
Furthermore, 67% of millennials admit to having made frivolous refund purchases in past years, as compared to the larger national population, of which only half admitted the same. When asked about the types of frivolous purchases made, responses included, “a brand-new car I couldn’t afford,” “a bunch of weed and alcohol,” “a full pack of concert tickets for the entire summer” and “a kegerator now collecting dust.”
When it comes to electronics purchases, many millennials are looking to upgrade their mobile devices with their refunds, with 30% planning to make a smartphone purchase using their refund money. Other planned tech purchases include home security products (20%), headphones (18%), virtual assistants (16%), and laptops or tablets (16%).
Given the big spending plans, millennials are considering alternative ways to cut back on the expense of costly electronics and apparel. 27% of millennials plan to purchase used clothing and 23% plan to purchase a refurbished smartphone, indicating potential cost-cutting in their spending plans this year.
For those looking for keep spending to a minimum, while still getting the tech products on their wish list, head to the Decluttr Store where you can get the latest tech at a fraction of the price.
*Survey of 2,012 U.S. consumers fielded February 1 – February 4, 2019.