Millennials are more inclined to save their tax cut windfalls than older members of Generation X, and they are also more inclined to invest it, according to a new survey.
Twenty-two percent of participants in a new Bank of America Merrill Lynch monthly survey aimed at Main Street said they would be saving their tax cut dollars, and 20 percent would pay down debt.
Slightly more millennials said they would save the proceeds, at 20 percent, compared to 18 percent for Generation X. There were 1,216 respondents who answered that question, in the survey conducted for BofA U.S. economists.
Seventeen percent of the millennials would pay down debt, compared to 15 percent of Gen Xers. But more Gen Xers would use their tax savings to cover every day expenses, at 11 percent, compared to 8 percent of millennials.
Investing the proceeds came in last as an option, well below the more than 15 percent who said they didn't know what they would do with the tax windfall.
Of millennials, about 8 percent would said they would invest their tax savings, compared to 7 percent of Gen Xers.
About 20 percent said they did not get a tax cut, but the BofA economists say that may be because the recipients did not realize they received one. Only 8 percent expect to use the extra cash for a big purchase.
Pay raises are expected to be modest, with the majority of full-time workers expecting a gain of 1 percent to 3 percent this year, according to survey.
Consumers also generally see home prices rising, but they believe it is a bad time to buy on the West Coast while still favorable on the East Coast, the survey shows.
Millennials are defined as respondents between the ages of 22 and 37, and Gen Xers are between 38 and 52.