Tax Season Will Bring Record Refunds. Use Them Wisely

Tax Season Will Bring Record Refunds. Use Them Wisely

Authored by Marc Cadin via RealClearMarkets,

Affordability is the defining economic challenge for millions of Americans. A recent poll found that 70% of Americans report that the cost of living is no longer affordable where they live, a concern that was highlighted in the most recent elections. From rising housing costs to the grocery aisle to the electricity bill, families are struggling to stay afloat.  

This year, however, many households will finally get relief thanks to a new federal policy. 

Signed into law this summer, the Working Families Tax Cut will deliver one of the largest tax refunds on record.  According to early estimates, the average tax filer will receive more than $3,700, a roughly $1000 increase from previous years. Military families are expected to receive an additional $1,776. 

At a time when families’ budgets are stretched thin, this policy is putting real cash into their wallets.  

There will be plenty of headlines this spring about the large refunds Americans will receive. But the success of this policy shouldn’t be measured by the dollars distributed this year. The larger question is whether American families will be more financially secure in the decades to come.  

For many households, this will be a financial inflection point. These refund checks can make a pivotal difference in creating an emergency fund, preparing for retirement, and saving for college tuition. 

When the large refund hits a checking account, however, the easiest decision is often the fastest one. Immediate needs and flashy purchases compete for our attention, while building savings requires an attention to detail that can be difficult in the moment.

Americans want to build a strong economic future, but personal finance continues to challenge us.  More than 60% of Americans don’t have a written financial plan, and nearly two-thirds couldn’t pass a financial literacy test.  

These financial illiteracy gaps come at a real cost.  On average, Americans lose $1,000 per year due to a lack of financial knowledge. Without the right tools and guidance, historic tax refunds may fail to improve long-term financial security. 

This policy won’t guarantee financial health alone. The real test is whether these refunds translate into long-term financial well-being. 

Some families may take advantage of existing savings incentives. From 529 college plans to the Trump Savings Accounts, there are plenty of already established government programs that allow Americans to stretch today’s dollars into tomorrow’s security.  

Others will invest in low-risk, high-yield options. These accounts may lack the flash of crypto, but compound interest gives families the ability to build stability.  A high-yield savings account typically returns around 4% annually, and the S&P 500 returns around 10%. These accounts require minimal maintenance and will create the savings necessary for long-term savings. If you continuously put your money away there, decades down the road, you will see your money expand. 


Many families will consult experts. In every community, financial professionals can advise on how to create a portfolio that makes sense for a family and their future. Financial planning is like going to the dentist. If you stay on top of your annual check-ups, your financial health will improve. 

The Working Families Tax Cut provides millions of Americans with a rare chance to reset their finances. Whether it becomes a fleeting windfall or the foundation of a lasting fiscal health will depend on what families do next.

Marc Cadin is the CEO of Finseca, an organization of more than 6000 financial security professionals dedicated to helping people protect and enhance their financial well-being. Finseca stands for Financial Security for All.

Tyler Durden
Fri, 03/20/2026 - 21:25