Tax refunds allocated to reducing debt, Ga. survey finds
ATLANTA (2/4/15)--When it comes to plans for their 204 tax returns, a hefty percentage of Georgia consumers will make their financial planners proud: 36.9% said they will use the money to pay off debt, according to the Year-End 2014 Consumer Survey conducted by the Georgia Credit Union Affiliates.
Paying off debt was the most popular option among Georgia consumers. The next popular option, with 32%, was savings, while 16.8% said they have other plans for the money.
About 39.1% of respondents said they expect to receive the same amount of tax refund money as last year, while 23.7% said their refund will be smaller and 28.2% do not expect a refund at all. The smallest percentage of respondents 7.9%, said they expect a larger refund this year.
Jerry Jordan, president/CEO of $75 million-asset CGR CU, Macon, Ga., said financial institutions often see a boost in deposits this time of year.
"We experience a significant spike in member deposits starting in late January, peaking in February and then see a significant run-off by the end of March," Jordan said. "We see this primarily in checking, some savings and we know that it's federal and state refund check driven. Many of our members have direct deposit tax refunds in excess of $1,000, and we see most of that money leave the account within days, if not hours, of the deposit."
Jordan suggests rather than spending tax refund money immediately, consumers pay down debt or put the money in savings as a cushion for financially difficult times.
"Member needs drive our suggestions as to the best use of that windfall tax refund money," Jordan said. "Our members trust us, and we talk face-to-face or on the phone to most of them. We encourage members at tax time--or any time--to come see us for financial advice."