Americans are continuing their frugal ways at tax time, with the majority of middle-class consumers planning to put their refunds towards savings and paying down debt , according to the First Command Financial Behaviors Index™.

The Index’s February survey reveals that 78 percent of middle-class Americans who have received or expect to receive a tax refund plan to put these dollars toward savings and investments, prepaying major bills or debt reduction. This mirrors frugal intentions expressed at the end of the 2009 tax season, when 45 percent of survey respondents said they would put the money into savings and investments and 40 percent said they were using their refund dollars to pay off debt.

Relatively few consumers expect to use their tax refund on non-essentials. The survey reveals that 27 percent of respondents will spend refund dollars on a vacation, dining out, home improvement or other consumer purchases. This also mirrors frugal intentions expressed last year, when a similarly small group of respondents said they would buck the frugal trend to spend their refund on consumer extravagances.

“Americans are investing their tax refunds in a more responsible financial future, one that embraces accountability as a way of life,” said Terri Kallsen, CFP® and executive vice president of strategic development at First Command Financial Services, Inc. “Spending and savings wisely has come back into fashion during the current financial turmoil. The time–tested values of prudence and self–reliance are moving us toward a healthier economic future. We are starting to understand the value of long-term gratification for retirement dreams.”

This continued focus on increasing savings and decreasing debt was predicted in the December survey, when respondents expressed a variety of positive financial aspirations for 2010. The Index revealed that many consumers have resolved to cut back on excessive spending (40 percent), get out of debt (35 percent) and use cash or debit cards more often instead of credit cards (29 percent).

Savings intentions are particularly strong among Americans with a financial plan. They are more likely to use their tax refund for general savings (44 percent) than those without a financial plan (35 percent). Meanwhile, Americans without a financial plan are focused on debt and monthly expenses. They are more likely to use their tax refund to pay down debt (44 percent) and pay monthly bills (21 percent) than respondents with a financial plan (33 percent and 11 percent, respectively).

“These results suggest that consumers with a financial plan are more likely to have addressed their debt concerns, allowing them to focus on growing their savings and pursuing their long-term financial goals and lifetime dreams,” Kallsen said.