With age comes wisdom, unless you're a millennial. In that case, you may already be pretty wise, at least when it comes to money management.
According to a new survey by Bankrate, 39 percent of millennials have decided to save or invest this year's tax refund — the most of any age group.
"We found that millennials are the age group most likely to save or invest their tax refund, with 39 percent saying that's how they plan to use their refund this year," said Sarah Berger of Bankrate.com. "In comparison, 23 percent of Gen Xers plan to save or invest their refund, as do 33 percent of baby boomers."
The study additionally found that of all those consulted (1,001 adults in the U.S), only 6 percent plan to "splurge" with their refund. That may sound like a staggeringly low percentage, but for Berger it's hardly surprising.
"For many people, this might be the biggest windfall they get all year, so it's the perfect opportunity for them to build a savings cushion that they know is important, but maybe haven't prioritized."
No More Messing With Me, Economy
It's also not surprising that millennials are leading the savings way, so to speak. The age group, generally considered to comprise those born after 1980 or 1982 (there's some debate about this), is famously frugal. Having been in college or relatively new in the workforce when the Great Recession hit, millennials had an alarming wake-up call about the importance of savings at a fairly young age.
"I'd rather save for a rainy day because after graduating in '06 and having a year or two before the economic collapse, I have had most of my adulthood be a rollercoaster ride dependent on the markets," said 32-year-old Kate Talbot. "Now that I am on the older spectrum of a millennial and making decent money, I'd rather be able to have funds if anything happens again to the economy."
Not Becoming Our Parents
Plus, nobody wants to end up stuck with the undesirable money matters that may have plagued their parents.
"I am a passionate saver, using my tax refund this year to top off my Roth IRA," said Luke Orlando, a 22-year-old recent graduate working in management consultant, adding that his peers can relate.
"The recurring theme in conversations with my friends is that they don't want to get burned like their parents," added Orlando. "We experienced very painfully the effects of a debt bubble going bust: lost homes, lost jobs, the loss of a huge facade financed by consumer debt. Most of my friends are more financially responsible than their parents, diligently stashing away a large chunk of their income each month, and avoiding making purchases they cannot pay for in cash."
Paying Off Student Debt vs. Saving for a Baby
But let's not forget all that pesky student debt encumbering so many millennials. Erin Lowry, author of "Broke Millennial: Stop Scraping by and Get Your Financial Life Together," finds that in a lot of cases, tax refunds will be going towards bringing those and other debt numbers down.
"Tax refunds are likely to be going towards student loan payments, paying off credit card debt and rent," Lowry told NBC News. "Some may also be saving for a medium or long term goal, investing or preparing for a splurge."
Perhaps the heart of the matter is that millennials don't perceive tax refunds as "surprise" money. Rather, they've been planning for it and know exactly how it can best be put to use.
"Some millennials consider tax refunds a 'forced saving' instead of adjusting withholdings to have larger paychecks during the year and save in smaller increments," said Lowry. "Because of this mentality, refund money may be going towards funding short- or medium-term goals such as paying off debt, purchasing a big-ticket item like a car, planning for a trip or funding a life milestone such as buying an engagement ring, home or preparing for a baby."
What's Everyone Else Doing With Their Refund?
And what about the older demographics? Historically, they may not be as cost-conscious as millennials, but as that 6 percent figure indicates, most every age group is on a similar page.
"The majority of people who are getting refunds aren't using it on shopping sprees," said Berger. "When they aren't saving or investing the money, they're typically paying for necessities (like food and utilities) or paying down debt."
Gosh, will we ever feel financially secure enough to have a little fun with this money? In the near future, probably not.
"For 2018, I predict people will continue to prioritize saving and investing. For the most part, we've seen a gradual uptick since 2010 in the number of people choosing to save or invest their refund, and I think that's a trend we will continue to see," said Berger.
Guess we'll stay in tonight.