What’s Soft Saving and Why Are Gen Z and Millennials Embracing It?

It’s no surprise that saving money has always been a challenge, but for Gen Z and Millennials, it can be extra tricky. Between high rent, student loans, and the rising cost of everything, the idea of aggressively stashing cash away for a retirement 30+ years away can feel both impossible and unfathomable. 

That’s why many young adults are turning to a new money mindset called “soft saving.” It’s a balanced approach that gives “Yes, I’ll save for the future, but I’m not going to skip living life today.”

What Exactly is Soft Saving?

Soft saving is the middle ground between traditional saving and extreme approaches like the FIRE (Financial Independence, Retire Early) movement. Instead of aggressively cutting spending to maximize retirement savings, soft saving takes a more flexible approach.

Save enough to be responsible, but also spend intentionally on the things that matter to you now.

You can think of it like financial mindfulness. You’re not neglecting your future self, but you’re also not giving a hard no to travel, concerts, or that weekend coffee treat that makes you feel good and human in this world.

Why Younger Generations Are Choosing Soft Saving

There are a few major reasons why the younger generations are adopting this approach.

1. The Economy Feels Rigged

Housing costs are sky-high, inflation is eating away at paychecks, and many jobs don’t offer pensions. For many, saving aggressively doesn’t feel too realistic. Yes, the job market is really rough, and your emergency savings should be at least 6 to 9 months’ worth just in case. But your mental health needs preserving as well.

2. Experiences > Stuff

Gen Z and Millennials grew up seeing that memories last longer than material goods. Whether it’s a trip abroad or a concert ticket, experiences are worth the splurge. 

As a Millennial who used to collect a lot of nerdy and pop culture figures, I now find myself saying, “I like it, but I don’t need it.” And then I’ll take a picture of it so I can draw it in my junk journal later for added satisfaction to save the memory. Plus, I seriously don’t have enough space for stuff anymore! The same goes for clothes.

3. Distrust in the Old Playbook

Younger workers aren’t sure Social Security or traditional retirement systems will be there for them. So why sacrifice all their fun now for a future that feels uncertain? I personally don’t think Social Security will disappear, but I do think there’ll be a reduction in benefits. That’s why when you plan for retirement, don’t rely solely on Social Security benefits, but think of it as a bonus.

And if you haven’t already, create an account on Social Security and review your earnings to date. Having the correct amounts will determine your payouts later. On my account, I saw that there were two working years with $0, which was absolutely not true. I had to collect my pay stubs and go to the Social Security Office to prove my earnings, and they fixed the issue.

The Upside of Soft Saving

It’s easy to see why this mindset is catching on, though.

• Better balance: No constant guilt about not saving “enough”
• More joy in the present: Prioritizing experiences and mental health
• Flexibility: Easier to adjust saving/spending as your life changes
• Intentional spending: Money goes toward things that actually matter to you!

There Are Risks, Though

Of course, there’s the downside to it. Too much soft saving can turn into not saving at all. 

• You could under-save for retirement
• Emergencies might derail you without a cushion
• Lifestyle spending can get out of control if you’re not careful

How to Do Soft Saving the Smart Way

Soft saving isn’t about ignoring your future but about balance. Here are a few ways to make it work:

• Start with an emergency fund – No matter what, this is a priority! Previously, the rule of thumb was 3-6 months of expenses, but now, with increased uncertainty, aim for 6-9 months.
• Don’t leave free money on the table – Get your employer’s 401(k) match if available
• Automate your savings so you don’t forget (even small amounts add up)
• Use a flexible budget like 50/30/20: essentials, fun, and savings.
• Check in annually and adjust when your goals and income change

So, Is Soft Saving for You?

If you’re the type that feels weighed down by strict financial rules, but you also don’t want to completely ignore your future, then soft saving might be a good approach for you. 

It lets you keep building stability while still giving yourself the freedom to enjoy life now. Things will just keep deteriorating on our bodies past 35+, so why wait until we’re “old” and “retired” to enjoy the money? In a world where uncertainty is pretty much the norm, that balance is exactly why this savings approach resonates with so many Gen Zers and Millennials.

The Money Move

Soft saving isn’t about “giving up” on retirement. It’s about rewriting the rules so they actually work in today’s economy. 

Save some, spend some, and don’t forget: life’s too short to miss ALL the fun now because of a distant future.