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TAX REFUNDS: A SAVINGS SOLUTION? Posted on February 5, 2013

For Immmediate Release
Contact: Tena Lozano
Consumer Advocacy Manager
California and Nevada Credit Union Leagues


42 Percent of Californians Plan to Save Their Tax Refunds

CONSIDER THIS: Tax refund time is just around the corner. Last year, the IRS issued more than 104 million refunds totaling $282 billion. For Californians lucky enough to receive one, a tax refund is like an extra paycheck. For others, it is an opportunity to replenish their “rainy day” fund. Still others count on it to splurge on the vacation of a lifetime.

According to a recent survey by the California and Nevada Credit Union Leagues, 42 percent of respondents said they plan to save their tax refunds in 2013. And 29.3 percent of California residents plan to use their refund to pay down existing debt. Only 2.3 percent are using their tax returns for large purchases, while a very small number have designated the funds to start a new business (0.4 percent). All in all, the results point to a tendency by California taxpayers to put their tax refund to work for them.

“Saving or paying off debt is sound financial advice that can immediately improve your personal finances,” said Dave Gunderson, president and CEO of Credit Union of Southern California in Whittier. “If your tax refund is substantial enough to start an emergency fund, do so. Or, if your monthly budget is weighed down with monthly credit card payments, use your refund to pay the balance down.”

Gunderson suggests using a tax refund for one or more of the following:

  • Start a “rainy day” fund. Putting money aside helps you manage the unimaginable.
  • Pay down a credit card or loan balance. Nothing hampers a budget like interest-laden monthly loan payments. Whether in the form of a credit card minimum amount due, or repaying a home equity line, shrinking your balance due can minimize your payment and shorten the life on the loan.
  • Invest it long term. The further away you are from retirement, the more your refund can benefit you. Talk to a credit union about long term investment options, and watch your money grow.
  • Invest it short term. While returns on short term investments, such as certificates of deposit, are at record lows, they are still safe and earn interest. If you are looking to make a major purchase in a year, investing short term can grow your refund into a generous down payment.
  • Start a college savings plan. If your children have college aspirations, consider using your refund to start an education savings plan. The cost of attending college is forecasted to rise significantly over the next decade, so saving for higher education now is smart.
About the California and Nevada Credit Union Leagues

With headquarters in Ontario, CA, the California and Nevada Credit Union Leagues is the trade association representing more than 300 credit unions in California and Nevada. More than nine million Californians and Nevadans are credit union members. For more information, go to

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