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What is soft saving and do you need to be doing it?

Are you seeing trending social media posts labeled “#softsaving” and wondering what it’s all about?

“The growing popularity of the soft living/soft saving trend among younger millennials and Gen Zers reflects a shift in mindset toward a more balanced approach to personal finance,” Rikin Shah, co-founder and CEO of GetSure, a digital insurance agency, says.

Here’s a closer look at what soft saving is and what to consider before adopting the method.

What Is Soft Saving?

Understanding soft saving requires taking a step back and looking at the “soft life” trend gaining steam on TikTok.

[Related:r7 Ways to Make Money on TikTok]

Living a soft life means rejecting the hustle culture and instead trying to live without stress, struggle or major challenges. Soft lifers prioritize relaxation and mental well-being above all else.

For example, regular exercise, healthy eating and an enjoyable job would take precedence over buying a flashy car, climbing the corporate ladder or trying to build an empire.

“This trend emphasizes a prioritization of experiences, self-care and mindful spending over material possessions. It can be seen as a positive response to consumerism, aiming for a more fulfilling and less stressful lifestyle,” Shah says.

[READ: What Is ‘Lifestyle Creep’ and Should You Try to Avoid It?]

Along the same line of thinking, “Soft saving is the soft life’s answer to finances,” according to a 2023 Prosperity Index Study from Intuit.

Instead of jumping into aggressive saving and investing regimens, Gen Z is focusing on feeling more fulfilled in the present.

The Intuit study found that 66.66% of Gen Zers are interested in finances only as a way to support their interests in life, while 75% say they’d rather have a better quality of life than money in the bank. Saving money is on their radar but it’s definitely taking a back seat.

“I think this trend is in line with what I have been experiencing with clients in Generation X and younger. People are moving away from the standard pattern of life: Educate, then work, then retire,” Tim Melia, certified financial planner at Embolden Financial Planning LLC, says. Once all of that is done, you can spend money on things you enjoy.

“I see clients more interested in education (whatever that may look like), sabbaticals, retiring earlier, gig work, etc. People experienced work-life balance in a new way during the pandemic — they have a taste for it and they want more,” he adds.

The Soft Saving Dilemma

The dilemma we all face is how to balance living in the present with preparing for the future.

Traditional financial advice leans heavily toward preparing for the future: You need to build an emergency fund, pay off debt, invest, save for retirement and pay your bills.

[READ: How to Retire in 5 Years]

For many, unfortunately, there’s never much money left.

Millennials and Gen Zers are questioning if they really want to put all their eggs in the “future” basket. Should they slave away their younger years in the hopes of a soft life in retirement, or sacrifice some ease during their golden years to enjoy life now?

“I think it’s a really good thing that individuals are not focused on saving everything, buying material possessions or ending life with as much money as they can accumulate. Many people are shifting to a greater focus on spending money on experiences when they are younger,” Melia says.

He does, however, cite the importance of some preparation.

“To be sure, a balance needs to be found. A sound financial plan needs to be in place to assure comfort and solvency in our later years. But that equation becomes different if people choose to work further into what were once traditional retirement years,” Melia says.

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What Is Soft Saving and Do You Need to Be Doing It? originally appeared on usnews.com

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