Authored by Marc Cadin via RealClearMarkets,

Affordability is the defining economic challenge for millions of Americans.A recent poll found that70%of Americans report that the cost of living is no longer affordable where they live, aconcernthat 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, theWorking Families Tax Cutwill 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$1000increase 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, andnearly two-thirdscouldn’t pass a financial literacy test.

These financial illiteracy gaps come at a real cost. On average, Americans lose$1,000per 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.

Source: ZeroHedge News