By Dennis Seid/NEMS Daily Journal
Assuming you’ve done your taxes and you’ve received – or will receive – a nice “refund” from Uncle Sam, you can do one of two things: spend it or save it.
More than 70 percent of U.S. taxpayers will get a refund this year, and the average amount is around $3,000.
Now, some people see this as free money. In reality, it’s the government borrowing from you for the past year. It was money withheld from your check, and now it’s coming back to you, interest-fee. Consumer finance folks advise that the money would have been better off had you invested it somewhere.
But apparently most people would rather see that big check around this time of the year so they can spend it on a vacation, new car, new toys, bills, etc.
Retailers are more than happy to accommodate you and your refund check, too.
So why am I bringing this up? Well, starting Monday, it’s “America Saves Week,” brought to you by the Federal Deposit Insurance Corp., otherwise known as the FDIC.
Said FDIC Chairman Martin J. Gruenberg, “Saving money in a federally insured bank account is the safest way to build savings for emergencies or future dreams. During America Saves Week, I encourage everyone to set a savings goal and work with an insured financial institution to meet their goal.”
According to the FDIC, some ways to save automatically toward a goal could include establishing regular transfers into a savings account and making regular contributions into a retirement plan.
FDIC research shows that 30 percent of American households do not have saving accounts, a much higher percentage than those who do not have transaction accounts, such as checking.
“Savings accounts are vital for dealing with unexpected emergencies and expenses, or predictable life events such as college or retirement,” said the FDIC.
The FDIC said consumers can jump-start their savings commitment by allocating a portion of any tax refund into a savings account or savings bonds. See – the agency isn’t telling you not to spend any of your money; it just wants you to save some of it.
On a related note about savings, GoBankingRates.com said savings rates offered by Mississippi banks and credit unions via CD and savings accounts are significantly higher than nearly all of the rest of the states. Unfortunately, we see Mississippi at the bottom of a lot of rankings, but in this case, the Magnolia State ranks fourth for highest average savings account rates.
So, go ahead and splurge a little. But put some money aside for the future, too. And maybe think about your withholding allowances.
Contact Business Editor Dennis Seid at firstname.lastname@example.org or (662) 678-1578.