Behavioral Science

How Americans Spend a $3,120 Tax Refund [INFOGRAPHIC]

by . March 11th, 2015

Tax refunds usually mean a slight bump in consumer spending, and this usually means great news for us. But what are Americans spending their tax refunds on?

For retailers and other cash-based businesses, tax refund season is a perfect time to do promotions, given that around 20% of the $3,120 (around $624) will likely be spent on splurges and that less then half (46.9%) will be placed in a savings account. Businesses that rely on travel and tourism spending will also be interested in the $405.60 average from tax refunds that can expect to get.

How else will Americans spend their tax refunds? Credits to DriveTime.

How-Americans-Spend-Tax-Refund-2015

 

Observations

  • Almost 4/5ths of tax refund spending  goes into savings and debt service together.
  • If you were hoping people don’t know how to prioritize, sorry to disappoint you.
  • The source doesn’t specify if “savings” includes other investments. 
  • Men aren’t practically all that different when it comes to spending habits.
  • The stereotype about women spending more is categorically true, but the difference is small enough not to matter in most contexts.
  • Men are more likely than women to save their tax refund money, but not by much.
  • Men are more likely to spend their tax refund on big ticket items.
  • A more useful data set for most entreps should be a bit more localized, and not one that looks at habits throughout the United States.

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Disclaimer: YouTheEntrepreneur is not affiliated with the author of the infographic or any of the sites mentioned. 

ABOUT THE AUTHOR:

Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.

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