Many consumers will likely use their tax rebates for debt repayment as being debt-free is the top New Year’s Resolution for 2008.
Columbia, MD -- (ReleaseWire) -- 02/26/2008 -- Representatives from the National Financial Awareness Network are predicting that consumers will use their tax rebates to pay down debt instead of spending it on goods and services.
The number one 2008 New Years resolution selected by respondents of a December survey from FranklinCovey is to eliminate debt, beating out losing weight, exercising, getting organized and spending more time with family and friends. Another study by personal goal setting and management service MyGoals.com reveals that 52 percent of its users list being debt-free as their top personal finance goal of 2008, up from 26 percent last year.
John Janney, president of NFAN, predicts that most taxpayers will use their upcoming 2008 tax rebates for debt reduction rather than to purchase goods and services.
“The expressed purpose of the tax rebates is to stimulate the economy by giving consumers a little extra cash to spend,” Janney explained. “However, it is more likely that taxpayers will use these funds to reduce debt because debt has become such a financially crippling factor in our lives.”
NFAN senior financial literacy writer Maggie Beetz added that gasoline prices, rising credit card debt and ballooning mortgage payments are pushing consumers into a financial corner that leaves little room for doing anything other than to use the tax refunds and rebates to pay down debt.
“The cost of living in America is far outpacing wages and our consumer debt is continuing to skyrocket,” Beetz explains. “We are being squeezed from all angles and any extra cash is best used to ease the burden of debt.”
Janney said that the sudden surge in debt payments may temporarily stave off delinquencies and charge-offs, giving creditors temporary relief in the wake of recent troubles. However, he cautions the credit crisis will continue to escalate under the pressure of a consumer population overly burdened with a sluggish economy, debt and unfair credit contracts.
The National Financial Awareness Network, Inc, is a financial literacy company that offers educational products and services related to personal finance, such as the popular Do-It-Yourself Debt Settlement Kit, at www.DIYDebtSettlementKit.com. The New York State Banking Department lists NFAN’s www.HelpForDebtors.com in their Financial Educational Resources Directory. For more information, please visit their website at http://www.nfan.com.