Watch TikTok these days, and you might come across the new #softsaving trend — whereby you might prioritize spending on things like near-term experiences over long-term savings — seemingly popular among Gen Z.

“Gen Z is focused more on spending on what makes them happy and reflects their values, rather than what may have been seen as the traditional success markers like buying a home or having a large investment account,” says Kara Duckworth, a certified financial planner at Mercer Advisors.

Intuit recently concluded in a survey on the topic: “Though Gen Z is interested in exploring and learning about saving and investing, the approach is much softer than in previous decades — it’s all about personal growth and mental wellbeing in the now — and they would rather feel more fulfilled now than save for a future that is unknown.”

Indeed, the survey found that while nearly three in four Gen Zers say the economy makes them hesitant to set up long-term goals, fewer than two in three overall Americans say they feel the same way. Gen Z is also more likely than the overall population to say they’d rather have a better quality of life than extra money in the bank.

What financial advisers have to say about soft saving

While so-called soft saving may. have its place, too much of it can be detrimental, says certified financial planner Peter Salkins at Integrated Partner. “Placing too much emphasis on the near term can really temper the ability for longer term success,” says Salkins, who notes that it’s key to balance short-term and long-term goals and determine how to allocate income and savings to achieve those goals.

“An unexpected event like a health emergency or a major car repair can quickly turn into a financial crisis without a savings cushion to draw upon,” Duckworth adds.

It’s also no secret that saving and investing early in life offers more years to benefit from compound interest. “If Gen Z focuses too much on short-term soft savings, they’ll miss out on the heavy lifting that simply investing for long periods of time can do to create a robust retirement fund and a secure server thailand financial future,” says Bobbi Rebell, a certified financial planner and founder of Financial Wellness Strategies.

Flynn Zito Capital Management certified financial planner Ryan Haiss adds that “a hypothetical example would be someone saving $200 per month from age 25 to age 65, earning 7% per year, which turns into $512,000 from saving $96,000 over a 40-year period. Someone could also save $200 per month from age 35 to age 65 (starting 10 years later), earning 7% per year, which turns into $270,000 from saving $72,000 over a 30-year period.” (See some of the highest savings account rates you may get now here.)

To maximize your savings potential, experts agree it’s important to be honest with yourself about how robust your financial health is when you’re determining how much to save — or if you should be saving at all. “Are you not saving in a 401(k) because you’re paying off medical or high interest debt? That’s likely a good reason,” says Salkins. “Or are you not saving because you want to buy an expensive car or go on an extravagant vacation, that’s likely not a good reason to forgo long term savings.”

While it might be trending on TikTok, the nuts and bolts of soft saving aren’t necessarily new. “Past generations did the same thing, the only difference with soft saving is that someone came up with better branding to make themselves feel better about procrastination,” says Charles Thomas, a certified financial planner at Intrepid Eagle Finance. “Whatever name you give it, failing to save early means you have to work that much harder later on.”


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