NerdWallet: Why tax refunds have lost their sparkle

This article is reprinted by permission from NerdWallet.

The typical advice about what people should do with their tax refunds — save for retirement! pay off debt! — ignores how little wiggle room many families have with their finances.

Tax refunds averaged $2,895 last year, and were the largest single cash infusion received all year by 40% of the checking account holders recently studied by the JPMorgan Chase Institute. Research shows:

  • Few splurge. Most Americans say they plan to save their refunds or pay down debt, but surveys show significant numbers use the money to pay for daily living.

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