Soft saving is a mindful approach where individuals prioritize current enjoyment over aggressive retirement savings, which can serve as an entry point to consistent saving but may pose challenges for long-term financial goals if not balanced properly. Experts suggest maintaining some level of investing for the future while allowing room for present-day pleasures, emphasizing automation and gradual increases in savings over time.
Gen Z is embracing the trend of "soft saving" as they face financial challenges such as high living costs, lower wages, and student loan debt. Many young adults feel discouraged and are hesitant to set long-term financial goals, with two-thirds believing they may never have enough money to retire. Instead of cutting expenses, Gen Z prioritizes a better quality of life over saving. However, financial experts emphasize the importance of having an emergency fund and taking advantage of compound interest. Starting early and contributing to retirement accounts, even in small amounts, can lead to significant growth over time.
A "soft saving" trend is emerging among younger workers, particularly Gen Z, who prioritize experiences and a better quality of life over saving money for the future, according to a report by Intuit. This trend reflects a shift in financial priorities, with younger investors putting their money into causes that align with their personal views and seeking emotional connections with brands and professionals. Personal saving rates among Americans have also decreased, influenced by factors such as the rebound from the pandemic and inflation. While concerns about retirement persist, younger generations are redefining retirement and are more likely to work past the age of 65 or pursue paid work during retirement. Despite saving less, Gen Z appears to be living within their means and spending on hobbies and non-essential experiences, such as travel and entertainment.
