Received your tax refund? Here’s how Americans are planning to spend it this year, shows report

Americans this year are getting bigger , and many are now deciding how to put that extra cash to work. The US Treasury Department, in a Tax Day release, said that as of April 14, the average refund this filing season topped $3,400, up 11 per cent from last year.

According to The Hill, the Internal Revenue Service () issued roughly 70 million tax refunds through April 4, compared to approximately 68 million during the same time last year and about 66.8 million in 2024.

Here’s how Americans are planning to spend their tax refunds:

According to a survey conducted by Experian last month, roughly one-third of 1,000 respondents planned to save their , marking an increase of two percentage points compared to the same survey conducted last year.

One in five respondents, or roughly 20 per cent, planned on using their refund to pay their . Seventeen per cent said they would use it to pay for necessities, and 10 per cent said they would invest the refund. Only six per cent said they planned on using the return money for “splurge” spending, marking a three percentage point fall from last year.

According to Amy Matsui, the vice president for child care and income at the left-leaning National Women’s Law Centre, while saving a tax refund is a “smart and responsible financial choice,” the prevalence of the practice highlights that these slightly higher tax refunds are not delivering the economic stimulus the administration promised.

If you still haven’t decided how to use your tax refund and what would be the best way possible, CNBC shared some suggestions on how to put your tax refund to work.

1. Paying off credit card debt: According to the Federal Reserve Bank of New York, in Q3 of 2025, Americans held over $1.233 trillion in , with the average balance topping $6,700. Since credit card interest rates are higher than nearly any other form of debt, chipping away at your balance is definitely one of the smartest moves you can make in terms of money. According to a TaxSlayer survey, roughly 37 per cent of Americans use their tax refund to pay credit card bills. While the average refund is less than the average credit card debt, most Americans won’t be able to clear it off completely. However, they will get the ball rolling.

2. Boosting emergency fund: It is extremely crucial to have a financial cushion to deal with unforeseen events, which could range from a broken appliance to a sudden job loss. Financial experts suggest putting three to six months’ worth of living expenses in an emergency fund. For instance, if the average household’s monthly expenses are around $6,440, then an would be somewhere between $20,000 and $40,000.

It is worth noting that over 40 per cent of people have only $250 or less in savings. So, refilling your emergency fund could be one of the most important steps. Remember that your emergency fund should still be easily accessible while earning interest.

3. Paying student loans: Although the pause on student loan payments ended in October 2023, millions of borrowers have yet to resume making regular payments. It can be tempting to treat student loan debt as less urgent than other financial responsibilities; after all, it’s not like your can be repossessed. However, loan servicers report delinquent accounts to credit bureaus, and missing payments can cause your credit score to drop by as much as 200 points. Putting your tax refund toward a larger-than-usual loan payment can help you catch up and move closer to becoming debt-free. Just make sure to check whether your lender imposes any penalties for making bigger payments.

4. Down payment on a house: The next best use of your tax refund money can be to make a down payment on a house.

5. Saving for children’s education: Citing 2025 data, the report said that in-state public college tuition averaged around $11,011 per year, while private school tuition averaged $43,505. Hence, using that money for children’s education can turn out to be a real game-changer, since it can reduce some of your burden.