With Tax Refunds on Their Way, National Non Profit Urges Americans to Pay Themselves First

Financing Everyday Life: Anxieties of the Debt Distressed (PDF)
National Phone Survey Here (PDF)

(ORLANDO, Fla.) April 5, 2005 - If you receive a $1000 tax refund this year, what will you do with the money? Put it directly towards those looming credit card bills, or into an emergency savings fund?   Maybe you'd rather spend it on a new big screen TV.   This question is the basis of a new national phone survey recently conducted by InCharge® Institute of America, a national nonprofit organization specializing in personal finance education, research and credit counseling.

The survey, which was commissioned by InCharge® Education Foundation to measure consumer attitudes towards their personal finances, found that a significant number of Americans (28 percent) are choosing to put their tax refunds into an emergency savings account. Only 6 percent said they would spend the money on discretionary purchases. The majority of consumers said that they would put the money towards debt or bills (47 percent).

"This is a very positive finding," noted Rebecca Stiehl, president of InCharge Education Foundation. "Although the majority of Americans are currently facing some type of debt, it is reassuring to know that many of them are actively saving while paying down that debt, and are not continuing to purchase additional items."

InCharge Institute of America recommends that all consumers, especially those in debt, always try to pay themselves first. "Even when paying down debt, you should save at the same time, so that when the debts are paid off, you're not starting from scratch - and you'll have a cushion to fall back on in an emergency, so you're not immediately sent back into trauma again after working so hard to get out of debt." said Stiehl.

This new survey data corresponds with a recent study conducted by InCharge Education Foundation, which further proves the importance of saving. InCharge Education Foundation's Signature Study, conducted in 2004, measured the attitudes of 1300 consumers nationwide, and assessed the financial challenges, money management skills, and bill paying behavior of both the debt distressed and the general population.

The study found that debt relief seekers are often so laden with money and credit problems that they can barely meet their living expenses, let alone find money for a financial emergency.

Twenty percent of the debt distressed surveyed expressed "no confidence" in being able to meet a $200 emergency compared to approximately 8 percent of the general population. The financial insecurity of the debt distressed is further underscored by the fact that only 5 percent have high confidence in their ability to meet a $200 emergency. This compares to 30 percent of the general population.

"Paying yourself first allows you to build confidence about your financial situation, even if you're not completely debt free," noted Stiehl. "We all need to be prepared for the financial twists and turns that life throws us, and these types of obstacles are much easier to overcome with a few extra dollars sitting in the savings account."

For more information, please contact InCharge Institute of America at (407) 532-5599. The survey and study results are also available on InCharge Education Foundation's website.

Headquartered in Orlando, Florida, InCharge^® Institute of America, Inc. is a national non-profit organization specializing in personal finance education and credit counseling. The InCharge Institute family includes InCharge^® Education Foundation, which publishes YOUNG MONEY^® magazine and Military Money^™ magazine and offers basic financial management education to clients and the general public, and InCharge^® Debt Solutions, which provides professional credit counseling and financial education services. InCharge is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA).