To spend or not to spend? The do's and don't's of tax refunds

April 15 is quickly approaching, and college students all over Duluth are lining up to get their taxes filed before the deadline. However, many students are ahead of the game, and have already filed, received and spent their hard-earned tax dollars. I decided to take an adventure around college campuses in the Duluth area to figure out just how much the average college kid receives on their tax return, and what they chose to spend it on.

“I haven’t yet received my federal refund, but my state refund was $288,” said University of Minnesota Duluth alumni Emyli Gudmundson.

“I decided that I would take the total amount of my state and federal refund and split it into thirds. One third to savings, one to student loans and one to get a new tattoo,” said Gudmundson.

The convenient connection between tax time and spring break has a large impact on some student’s refunds. According to, more college kids seem to be ‘spenders’ rather than ‘savers’ when it comes to refunded tax and student loan money.

“I received around $600 back,” said Lydia Elvine, a sophomore at UMD. “Most of my refund went to things like rent and utilities. The rest went to getting my nails and hair done.”

However, some students are indeed ‘savers’, and have chosen to completely invest their reimbursements.

“I got around $5,400 back from taxes,” said University of Wisconsin Superior student John Staine.

“I actually put $500 of my refund in Etrade, which is a stock trade. I don’t know what I’m using it for quite yet,” said Staine.

Besides discovering how different kids around the area used their tax money, I was also interested in how they thought tax refunds should be spent, even if they hadn’t done it themselves.

How Students Spent Their Tax Refunds

“If someone doesn’t have a vehicle, I think they should buy a vehicle first. Other than that, I think they should just hold onto the money, let it build up, and save it,” said Staine.

“Personally, I think college students should definitely save their refund for school or rent, considering we’re all going to be in a considerable amount of debt coming out of college,” said Elvine.

Ironically, one of the students I spoke with turned out to have extensive knowledge of the tax return process due to her double major in finance and accounting with a minor in financial planning and her participation in the student-run Vita Program.

“Vita is volunteer income tax assistance. It’s a free way for low to middle income people to get their taxes done,” said Alyssa Shimota, a graduating senior at UMD. “This is my first time doing Vita. It’s a requirement for my accounting major, in place of an accounting internship through UMD. Each volunteer has 6 shifts that last 3 hours long.”

According to Shimota, most students that file taxes receive less on their tax returns because they are still considered a dependent.

“I’ve only done taxes for a couple of students. Most of the taxes I’ve done were for older individuals. The amount students gets back depends on if their parents claim them or not. If they are a dependent, they have been on average receiving $400-$500, and if they’re independent, around $1,500,” said Shimota.

In general, most of the students I talked with were still dependents of their parents, and therefore did not receive a lot of money back. However, one of the student I asked said that they were using the entirety of their refund to fund a vacation.

“Most of the people who I helped file didn’t mention what they would do with the money, but some kids did say they were putting it toward spring break or rent money,” said Shimota.

Instead of spending the money on recreation or rent, one student told me they were using their refund to pay for a business opportunity down in Kentucky.

“I got about $300 back in taxes. It went toward gas, a bus ticket, and a ticket to a much awaited business conference in Louisville!” said Kaya Neigum, a sophomore at Lake Superior College.

Overall, I was impressed, and somewhat surprised to discover how different students decide to spend their tax refunds. The majority of the kids used the money for rent, food and gas, while others chose to fund a weeklong vacation. Only 2 out of the 14 kids I spoke with had any intention of saving their refund.

“I’ve actually really enjoyed volunteering for Vita so far. I’ve learned a lot in the tax classes at UMD, but I’m a hands-on learner so it’s been a great experience to actually prepare the tax returns. I think there are a lot of things that students don’t know about their taxes that are pretty important to recognize,” said Shimota.

The Vita Program will continue until April 12th at the Duluth Public Library, UMD’s Labovitz School of Business and Economics, Fon du Lac Tribal Education Center and Fon du Lac Tribal and Community College.

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