Receiving a tax refund may not necessarily be the best plan for your finances. Remember: a tax refund means you paid too much tax throughout the year. Instead of waiting until March or April to get a refund, you could decrease the amount of taxes withheld from your paycheck and increase the amount of money you take home every pay period. In 2012, the average tax refund was $2,700. That means the average taxpayer could be making an extra $225 a month. What could you do with an extra $225 a month?
Of course, getting a large refund during tax season is hardly a bad thing. It can give taxpayers opportunities they usually don’t get throughout the rest of the year. Mint took a poll and asked people how they planned to use their refund. The results may surprise you: only 13% of those surveyed said they planned on using the money to make a large purchase. 42% planned on using their money to boost their savings, while another 42% said they would use their money to pay down their debt.
To see the rest of the results, click on the image above for the full infographic from Mint.
Are you expecting a large tax refund this year? How are you planning on spending it?