A ‘Soft Saving’ Trend Is Emerging Among Young People

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.

  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.

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.

Retiring and savings

  Retirement is the grand finale for most workers. However, more are concerned they may not be able to retire at all.

  A report by Blackrock shows that in 2023, only 53% of workers believe they are on track to retire with the lifestyle they want. A lack of retirement income, worries over market volatility and high inflation were some of the reasons cited for a lack of confidence about retirement among workers.

  Younger workers also share the same sentiments, where two in three Gen Z are not sure if they will ever have enough money to retire.

 However, this fear may not be that much of a concern for the younger generation, as most are actually not looking to retire early — and some don’t want to retire at all, the report by Intuit showed.

CNBC /// Quek Jie Ann