Tax refunds: Save or splurge?

(NBC News)  It’s the heart of tax season, and that has many Americans thinking about what to do with their refund.

If you are getting money back that extra cash can feel like a bonus, but what should you do with the money?

“As the economy improves we think Americans are looking at that extra chunk of money they are going to get from Uncle Sam as a way to save for their future,” says the National Retail Federation’s Kathy Grannis.

A recent survey by the NRF found 50 percent of those receiving refunds plan to save the money.  Only 13 percent said they will splurge on a vacation, while another ten percent plan to
spend their return on a major purchase like a television or a car.

Perhaps the biggest savers are young Americans. More than half of Americans between the ages of 25 to 34 plan to tuck away their refunds.

“This is the age group that may not have a lot of money socked away at this time,” Grannis says.  “They learned from their parents about the potential about crisis of the economy and they learned the hard way that money doesn’t come easy.”

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