North Central College assistant professor of economics quoted in USA Today

Ryan Decker shared the importance of having emergency savings and how best to spend your tax refund

The 2022 tax season is swiftly coming to an end, but the IRS warned that many taxpayers could see delays in their refunds as the agency confronts a worker shortage and severe backlog of unprocessed returns. Inflation is at an ultimate high—nearly 8 percent compared to last year—and household savings are drying up as cash-strapped consumers take on more credit card debt to finance purchases.

Interest rates on credit cards, auto loans and mortgages have risen since the Federal Reserve raised interest rates in March 2022, the first time since the start of the pandemic. Borrowing money will become even more expensive as the Fed prepares to raise interest rates six times this year in a bid to lower inflation.

As a result, the question of ‘what to do with your tax refund?’ has many Americans looking to want to pay off debt; however, economists warn that if there is no financial reserves available, this could put people across the nation in a credit debt cycle.

Ryan Decker, assistant professor of economics and director of the Center for Financial Literacy at North Central College, was quoted in USA Today, where he provided analysis on what to do with your tax refund.

“If you’re fortunate enough to have adequate emergency savings and minimal debt, consider putting some of your refund into a retirement account,” said Decker. “You can contribute to your 2021 traditional or Roth IRA through April 15, even if you’ve already filed taxes and received a refund.

Read the full story on USA Today.