Some people choose to let the income tax deduction choices on their job filing status be a savings plan. While most folks want the government to receive the minimum possible from their hard won earnings, some see it differently. At the tax filing season, some people owe the government money, some are owed. If you’ve chosen to have extra deductions, without having the extra expected income, then you are likely to get a refund. It’s a unique savings plan.
For those who have trouble being disciplined savers, this can be an easier way to accrue earnings without having to think about it. Of course, if they had more discipline, they would gain some benefits by saving with a bank. Access to their funds in an emergency is one advantage. Earning interest on that money is another. The government allows for neither when it collects income tax from employee’s through their employers.
There is something exciting about getting a large check all at once, versus the more mundane savings method. Perhaps it’s an immature approach, but it does have the benefit of working toward building savings that otherwise wouldn’t happen. Some people need a gimmick or excitement associated with their money. With interest rates so low, it’s not much of a loss to do it this way. It’s a way more successful strategy than gambling or playing a lottery.