For most people, their goal is to work hard, save money and retire early. But a “soft saving” trend is emerging among younger workers, challenging the traditional way of thinking.
Soft saving refers to putting less money into the future, and using more of it for the present.
Generation Z — a generation that puts experiences before money — is leading the so-called soft saving wave, according to the Prosperity Index Study by Intuit. “Soft saving is the soft life’s answer to finances,” said the report.
A “soft life” is a lifestyle that embraces comfort and low stress, prioritizing personal growth and mental wellness.
“Younger generations value a balance between the traditional ‘hustle’ to save every single penny and using some of their extra income to enjoy life now.”
Ryan Viktorin
Vice President, Financial Consultant at Fidelity Investments
The report found the approach to investing and personal finance by Gen Z’s — those born after 1997 — to be “softer” than previous decades.
What does that mean? It means younger investors tend to put their money in causes that reflect their personal views.
They also seek emotional connection with brands and professionals they choose to engage with, Liz Koehler, head of advisor engagement for BlackRock’s U.S. Wealth Advisory business told CNBC.
Are people saving less?
Younger workers have a desire to break free from restrictive financial constraints.
Three in four Gen Z would rather have a better quality of life than extra money in their banks, the Intuit report shows.
In fact, personal saving rates among Americans today seem to mirror the soft savings trend.
According to the U.S. Bureau of Economic Analysis, Americans are saving less in 2023. The personal saving rate — the portion of disposable income one sets aside for savings — was significantly lower at 3.9% in August, compared to the 8.51% average in the past decade, according to data from Trading Economics which goes as far back as 1959.
One of the reasons for a drop in…
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