The days of putting that tax refund toward a big-screen TV or other indulgence are over, at least for now.
Americans say they'll be a lot more frugal with their refunds this year, with more people than ever planning to save the cash they get back from Uncle Sam instead of spending it, according to the National Retail Federation's annual Tax Returns Survey.
Nearly half, or 49 percent, of those expecting a refund say they plan to save the money rather than spend it right away, the highest percentage in the survey's nine-year history, the retail group said.
"In the past, we would make plans for our income tax refund," said Chantay Bridges, 39, a real estate agent in Los Angeles. "This year we have determined to save it. We are going to put it into a five-year CD and allow it to grow."
Bridges, who expects to receive at least $5,000 back, said she is just as excited to stash the entire refund this year. "It makes me feel really good because it will put us in a better position."
Luke Orlando, a 21-year-old finance major at the University of Texas, said he plans to fund his Roth IRA. "Compounding? That's hard to beat. That's a lot better than buying a new stereo for your car," he said.
For Orlando, it will be the first substantial refund he has received from the IRS. He anticipates getting back about $1,000, mostly from internship income.
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In addition to savings, about 35 percent of those polled said they planned to pay down debt and 22 percent will use the refunds for groceries, gas or other daily living expenses, according to the retail federation.
Only about 11 percent said the money would go toward a vacation, and even fewer would splurge on a big-ticket item like a television or car, although about 8 percent were considering a small indulgence like a trip to the spa or night on the town.
Young millennials, like Orlando, were even more conservative, the report said, with 57 percent of 18-to-24 year-olds planning to save their refunds.
"Millennials are being wise and putting saving ahead of splurging as they look for ways to get ahead," said Pam Goodfellow, director of Prosper Consumer Insights, which conducted the survey. "Young consumers see their refund as an opportunity to build their savings without making a dent in their monthly budget," she said in a statement.