Tax refunds pay down debt; shows healthy change

More than half of those who expect a refund on their income tax told AP pollsters they will use the money to pay bills rather than go on a spending spree.
The survey taken last week found:
— 31 percent of those receiving refunds said they will use at least part of the money to pay credit card bills, compared with 17 percent a year ago.
— 19 percent said they will use their refunds to pay utility bills, compared with 10 percent a year ago.
— 17 percent said they will use their refunds for rent or mortgage payments, compared with 7 percent a year ago.
— 11 percent of those receiving refunds said they would use them to go on vacation, a slight increase from a year ago.
— 5 percent said they planned to use their refunds for a down payment on a car, also a slight increase.
— 4 percent said they would use their refunds to buy stocks or bonds, about the same as a year ago.
The most significant fact in these numbers is that the percentage of frugal families has nearly doubled over the past year — despite the fact that the recession was well under way by April 2008.
While there remain some economists who will argue that Americans must return to their old borrow-to-spend habits if the economy is to recover, a good many more now agree that debt is just as bad for families as it is for governments. In the long run, families only prosper when they spend less than they earn and save enough to carry them through emergencies and provide for a comfortable retirement.
With this Ben Franklinesque observation in mind, let us now begin to preach that the national attitude toward getting and spending should change permanently. What families think they must do during a severe recession to save themselves from penury is also a prescription for living happily ever after.

— Emerson Lynn, jr.