Gen Z is ‘soft saving,' where they are 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

Gen Z is ‘soft saving,' where they are 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, per MarketWatch.

For many, the conventional goal involves working hard, saving diligently, and retiring early. However, a new trend known as "soft saving" is challenging this traditional mindset, particularly among younger workers.

Soft saving entails allocating less money for the future and prioritizing present needs and experiences. Generation Z, known for valuing experiences over monetary gains, is at the forefront of this emerging soft saving wave, as revealed by the Prosperity Index Study conducted by Intuit. The study suggests that soft saving aligns with the principles of a "soft life," characterized by comfort, low stress, and a focus on personal growth and mental wellness.

Younger workers, driven by a desire to break free from financial constraints, are expressing a preference for an improved quality of life over accumulating extra funds. According to the Intuit report, three out of four Gen Z individuals prioritize a better quality of life over additional money in their bank accounts.

This soft savings trend is reflected in the current personal saving rates among Americans. Data from the U.S. Bureau of Economic Analysis indicates a decline in personal saving rates in 2023. In August, the personal saving rate, representing the portion of disposable income allocated for savings, stood at 3.9%, a notable decrease from the 8.51% average observed over the past decade, as reported by Trading Economics, which has data dating back to 1959.