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Empowering your well-being: Strategies for maximizing tax refunds

DUBUQUE, Iowa—Tax filing season is in full swing. And with the average American taxpayer expecting to receive a refund of $3,182, that financial influx can spark a mental tug-of-war on what to do when that lump sum hits their account. Dupaco Community Credit union experts find that when decisions are made to save or pay off debt with a lump sum from a tax return, those decisions positively impact overall well-being. What do Americans typically do with their tax returns? And better yet, how do they feel about them?

Terry Belken, financial advisor at Dupaco Community Credit Union, based in Dubuque, Iowa, says, “Our credit union members have similar patterns on how they spend or save their tax returns each year: They pay off debts, especially their credit cards, put money away for future emergencies, and if there is money left over, they may splurge a little on something.”

Belken notes that members like and use a Dupaco savings tool (at refund time and all year long) called You-Name-It Savings.

“Members can name their savings accounts whatever they want, and by naming the account, they feel a greater sense of control and satisfaction when they put money into those accounts. When tax returns come, and members put them into their named accounts, it feels like a windfall of money,” he notes. “There is a ‘high’ or a boost that members tell us about, seeing their accounts grow and feeling a sense of control over their savings … and their futures.”

Dupaco members’ use of their tax returns mirrors those of people on a national level. A February 2024 study by LendingTree shows that Americans across the country do very similar things with their tax returns. Forty-four percent use their return to pay off debt, 43% use the return to put away for savings/emergencies and the remaining choices range from saving for a big item (like a car), to taking a vacation to giving money to a charity. Studies from other financial sources (NerdWallet, Investopedia and others) show similar findings.

Belken adds, “We commissioned a study from the Filene Institute (a national financial research firm), and it showed us just how important the feeling of saving is to members’ well-being. The Filene study yielded numerous findings, and when related to saving money and the feelings of well-being, the correlations were quite strong: Our members who have multiple savings accounts with Dupaco felt a greater sense of well-being than those with fewer or no savings accounts. The study proved to us what we knew from our interactions with members. We found that when our members set specific savings goals they can accomplish, they feel better, both physically and mentally. They feel more confident about their futures.”

The Filene Research Institute study, conducted annually in 2019, 2020 and 2021, used an email survey to garner nearly 2,300 respondents (both Dupaco members and non-members). Respondents included men and women over the age of 18, residing in 36 counties in Iowa, Illinois and Wisconsin.

Dupaco Community Credit Union is a not-for-profit, member-owned financial cooperative headquartered in Dubuque, Iowa. It is dedicated to the financial well-being of its members, and specializes in personalized financial counseling, money advice and education. It offers savings, loans, investments, insurance and wealth management products for individuals and businesses. Dupaco serves residents in 118 counties throughout Iowa, northwest Illinois and southwest Wisconsin. Founded in 1948 by 10 Dubuque Packing Company employees, membership has grown to more than 164,000 with assets exceeding $3.2 billion. It has nearly 700 employees and 22 branch office locations. Dupaco is a Community Development Financial Institution (CDFI). It is a Forbes Best-in-State Credit Union, Forbes America’s Best Small Employer and a Des Moines Register Top Workplace. Learn more at