4 Dumb Things People Spend Their Tax Return On
So, it’s approaching the end of the year and also that time where we start thinking about how we’re going to spend that big fat tax refund check from Uncle Sam. The IRS reports that last year, it issued over 101 million refunds and the average refund amount was $2,651. Just about half of us expected to receive a refund, according to a Bankrate survey, and for those of us who actually receive a chunk of change this coming tax season, some of us will be responsible, and others will blow the money and party like it’s 1999.
What are you going to spend your refund on? CNN reports indicate that in 2011, around 42 percent of Americans used at least some of their refunds to pay down debt, and another 42 percent placed part of their refund into savings. Some taxpayers — around 30 percent — used portions of their refunds for everyday expenses, and some used their money for vacations, major purchases, and other expenses.
“Other expenses” is a broad category, as is the category: “major purchases.” To gain a little more insight on what exact types of purchases fall into these categories, we scoured social media sites and other resources to see how Americans spent their tax refunds over past years. Here a few of the most ridiculous expenses we found.
1. A shopping spree
Whether they decide to allocate it to Chanel or Walmart, or to Apple or Android, many taxpayers go out and buy hundreds — even thousands — of dollars worth of merchandise they do not need. One Twitter user says about last year’s tax refund, “Spent tax refund on luxury goods, now considering bankruptcy,” and another says, “I thought I was an adult until I spent my entire tax refund at Spencer’s Gifts.”
These specific social media users are certainly not the only one’s to go out and blow their tax refund checks, though. Many taxpayers view this amount as “extra money,” as opposed to money they earned and therefore, they feel content spending it. About 7 percent of Americans admitted to splurging or going on shopping sprees with their tax returns. Remember the 2008 economic stimulus checks from a few years ago? According to a publication by the Kellogg School of Management, “On average, households spent half the amount of each stimulus check within the same quarter that it was received. (The average amount for each check was $950.) Between 12 and 31 percent of the stimulus checks went to purchase non-durable goods.”