April 15, 2024 | Allison Robertson

The Gen Z Approach to Saving

A New Way to Save

There’s a new money saving trend that the Gen Z crowd (and even some millennials) believe is the way of the future—but it's leaving experts feeling wary for their future.

Young man and empty pocket split image

What Experts Suggest

Experts have always advised us to cover your bills, pay down your debt, build and emergency fund, and save for retirement.

These Rich People Are Obnoxiously WealthyTima Miroshnichenko, Pexels

Stressful Financials

But for many of us, there’s not enough money left over to comfortably save—and catching up is stressful. In fact, just covering the bills in full is stressful enough these days.

Woman Counting Money and Paying Bills with SadnessTima Miroshnichenko, Pexels

Finding a Balance

Gen Z has come up with a way to find a balance between living in the present and preparing for the future.

Woman thinking and holding a coffee cup.Karolina Grabowska, Pexels

Prioritizing Mental Health

They call it, soft saving, which emphasizes personal growth and mental health instead of worrying about future financial security.

Happy man paying bills on his laptop in living roombaranq, Shutterstock

Soft Saving

Soft saving is a form of “soft living”, which is a lifestyle that focuses on being fulfilled, setting boundaries and ditching the traditional hustle culture.

Essentially, it means, working to live—not living to work.

Black woman pointing up ,looking surprised.Andrea Piacquadio , Pexels


The Gen Z group says they don’t exactly do it on purpose, or at least not at first. Soft saving is something they seem to do by default—as a natural reaction to the way the world is today.

Man counting money.Karolina Grabowska, Pexels

A Realistic Approach

It’s not that they don’t care about retirement, or having financial literacy—they just have a more realistic approach to saving money.

Money and savings plan for retirementNitiroj, Shutterstock

Less Stress

Soft saving focuses on embracing the present, with less weight on budgeting and a lot less stress on investing. It rejects what previous generations have been chasing for years.

Portrait of a happy young woman in sunglasses throwing out money banknotes isolated over white backgroundDean Drobot, Shutterstock

Previous Generations Approach

For generations before them, people have been programmed with a “rise-and-grind”, “make-it-or-break-it” approach to financial wellness—which has caused an immense amount of stress for many.

Elder man holding moneyAndrea Piacquadio , Pexels

The FIRE Movement

One particular financial movement popular among the boomers is referred to as FIRE, which stands for “financial independence, retire early.”

Man in black shirt thinking.Ranta Images, Shutterstock

Life Fulfillment Goals

But Gen Zers don’t want to wait until their later years to enjoy life. According to a study by the Prosperity Index, 73% of Gen Zers say they’d rather have a better quality of life than extra money in the bank.

Woman Covering Face with Hand Fan Made of Paper MoneyTima Miroshnichenko, Pexels

How Its Done

This means that Gen Zers find it more important to achieve a work-life balance, pursue hobbies and enjoys things like travel, rather than push harder for a promotion, find extra work or cut out discretionary expenses.

Blown Away Stupid FactsShutterstock

What Started This Trend

Gen Zers are the ones who are just starting their financial journeys and have already been affected by a turbulent economic environment, complete with: a global pandemic, record-high inflation, mediocre wages, soaring interest rates, and impossible student loan payments.

Young man wearing black shirt is holding money.Tima Miroshnichenko, Pexels

A Disadvantage

According to Consumer Affairs, Gen Zers have 86% less purchasing power than Baby Boomers did in their 20s. They pay far more for essentials like food, housing and gas, and they have much more debt.

Pretty woman in red with shopping bag in the supermarket.Lobur Alexey Ivanovich, Shutterstock

A High Cost of Living

Inflation has become a serious problem for the younger generations. More than half, or 53%, of Gen Zers say a high cost of living is a barrier to their financial success, according to a survey from Bank of America.

Curly-Haired Woman Holding Paper Money on White BackgroundKarolina Grabowska, Pexels

Student Loans

Even though they have a more relaxed approach to saving, Gen Zers still prioritize education. This is evident in their immense student debt payments—which are drastically higher than the generations before them.

Depressed young girl in casual wear sit on bed PR Image Factory, Shutterstock

Student Loan Payments

According to Bankrate, the average Gen Z borrower has an outstanding student loan of at least $24,473—most are much higher.

Close Up Photo of an Agreement on a Paper.RDNE Stock project, Pexels

Economic Uncertainty

The economic uncertainty doesn’t just affect how we spend, save and invest—it also affects how we view the future.

Sad woman in blue top standing at a balconyEngin Akyurt, Pexels

Hesitant to Save

According to a study done by Intuit, nearly three-quarters of Gen Zers say the economy makes them hesitant to set up long-term financial goals, and two-thirds of them aren’t sure they’ll ever have enough money to retire.

Thinking business woman with glasses looking up on many questions markpathdoc, Shutterstock

Home Ownership

For most Gen Zers, the notion of building wealth through home ownership feels completely out-of-reach. Due to rising home prices and high mortgage rates, many have accepted that they may never own a home.

For Sale sign on houseWilliam Barton, Shutterstock

The Here and Now

Instead, they have chosen to focus on the here-and-now. Which does still include paying down debt, but also prioritizing their happiness.

Satisfied man at workG-Stock Studio, Shutterstock

Expert Opinions

While experts agree that soft saving can be beneficial to mental health and wellness, they still believe a balance between short-term happiness and long-term financial security is important.

A Happy Woman Holding Shopping Paper BagsMax Fischer, Pexels

Personal Choice

According to Bola Sokunbi, founder of Clever Girl Finance and CNET expert review board member, “The choice between prioritizing quality of life over long-term financial health is really a personal one, and it all depends on the individual’s values and circumstances.”

Woman in Red T-shirt Pointing to Her HeadEngin Akyurt, Pexels

The Future

Sokunbi also said, “the future is not predictable, but we are living longer on average than past generations, and we need to be able to take care of our future selves,” reminding Gen Zers not to completely ignore future financial stability.

Person in purple shirt Saving For RetirementAndrey_Popov, Shutterstock

Do Both

It’s very possible to have a ‘soft savings’ approach and still put something aside for the future. There are ways to change our spending while still enjoying life, and still put aside a few bucks here and there for the future.

Woman holding money.Tima Miroshnichenko, Pexels

Is soft saving a bad financial move?

Gen Z has different ideas of what it means to be successful and propser—which is their whole idea to soft saving. But according to Bernadette Joy, a personal finance coach, “you don’t have to sacrifice your quality of life to improve your prospects for financial stability.”

Young man in suit is thinkingThirdman, Pexels


“Investing in personal growth and mental well-being are important investments to make so that you can invest actual dollars in the future,” said Joy.

The hope is that one will lead to the other.

Woman in Pink Long Sleeve Shirt Using LaptopAndrea Piacquadio, Pexels

Paving the Way

“But at some point,” Joy continues, “the hope would be (even if it takes years) that the investment in mental well-being will allow the person to focus on investing for the future.”

Putting Coins in a ContainerRDNE Stock project

Focusing on What’s In Their Control

Gen Zers don’t want to live paycheck to paycheck. But with huge macroeconomic barriers, it feels healthier to focus on what is in their control.

A Person Looking in empty Wallet.Ahsanjaya, Pexels

Retirement is Too Far Away

Which is why they focus more on building an emergency fund than a nest egg for retirement that is 40-something years away.

Young woman with long hair is seating in bed with upset face.stockking, Freepik

How to Prioritize

While we understand Gen Z’s approach, and it can even sound appealing to the right person, it is important to prioritize the right things.

At the very least, pay your bills, open up a high-yielding savings account, and contribute what you can to your 401(k).

Bearded man feeling confused.Mikhail Nilov , Pexels

Bottom Line

The bottom line is, you can take a “soft savings” approach and emphasize your present needs, but you don’t have to sacrifice your long-term financial goals entirely.

It’s all about balance.

Woman Holding a Five Dollar BillKarolina Grabowska, Pexels

Sources: 1, 2


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