Work hard, live frugally, save aggressively. Do this, and you’ll live richly when you retire. Sound familiar? This money mindset has been passed down for generations. Unfortunately, we’re living in a very different economic reality than the one our parents and grandparents inhabited.
Today, the median sale price for a home is more than 1,000% higher than it was in the 1970s. Federal minimum wage hasn’t been raised since 2009. People have to work multiple jobs just to get by because basic necessities, like health insurance, cost so much.
These hardships aren’t lost on Gen Z. In fact, they’re so sick of the struggle that they’ve decided the money wisdom of yore no longer applies. Rather than aggressively setting aside money for the future, they’re easing up on savings and revving the spending on fun, wellness-forward experiences they can have right now.
It’s true the world is different, and our lifestyles adapt as a result. But does this mean traditional money-saving habits should change too?
To find out, I talked to Bree Shellito, the director of financial well-being at Wings Credit Union, about the most important benefits and drawbacks of this “soft saving.” Read on for the surprising advice that will change how you think about saving and spending today—and for years to come.
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What is “soft saving,” exactly?
Soft saving involves prioritizing your current well-being through experiences and other purchases that improve your quality of life, rather than aggressively saving for future financial goals. While it still emphasizes the importance of saving for retirement or having a nest egg, it gives people more wiggle room to indulge in life’s pleasures and feel good right now.
Someone who is soft saving may only contribute enough into their 401(k) to reach their employer’s match, rather than maxing out their full annual contribution. With that extra money in their paycheck, they might take a solo trip abroad or invest in talk therapy that year.
The practice isn’t exactly new—some people have always chosen to strike a balance between current comforts and future stability. But around 2023, Gen Z began using the term soft saving to explain this approach.
It’s a departure from the financial independence, retire early (FIRE) method, which became popular in the early ’90s as a means of gaining financial freedom in the future through extreme frugality today.
Why are so many people soft saving these days?
There are several economic, social and cultural reasons for the soft-saving trend. For starters, young people today have already lived through unprecedented experiences that have changed their perspective on life.
“Many Gen Z adults came of age during the pandemic, historic inflation, housing affordability challenges and ongoing economic uncertainty,” says Shellito. “For many, the future has felt unpredictable and financially distant, so it makes sense to prioritize quality of life today.”
People are working just as hard today as they did 50 years ago—it’s just not getting them as far. Gen Z sees Millennials struggling to buy homes, raise kids and pay for basic needs, despite doing all the right things. And in response, they’re asking a rational question: Why keep following the status quo if these methods are no longer working?
Wobbly economics aren’t the only factor to blame for soft saving, though. As the most online generation, Gen Z has unfettered access to their peers’ lifestyles (even when they know, deep down, it’s just a highlight reel). This creates a sense of competition to keep up.
“Social media and constant digital connection amplify lifestyle visibility and shorten the distance between desire and action,” Shellito says. “Layer on a cultural shift toward valuing wellness, flexibility and experiences more openly than previous generations, and you have the perfect conditions for soft saving to emerge.”
What’s so great about soft saving?
Soft saving has plenty of immediate benefits for anyone who wants to put their well-being before the pressure to amass retirement wealth. Here’s why you might want to give it a try:
It helps align spending with personal values
Regardless of your age, soft saving is an opportunity to step back and assess how your spending aligns with your personal goals—not the societal standards you think you’re supposed to meet.
“We’ve seen that Gen Z tends to question traditional milestones like homeownership timelines or rigid retirement paths,” Shellito says. “They are asking, ‘What actually matters to me?’”
The answer to that question looks different for everyone. It could be that you care about traveling to a new country every year or spending quality time with family. The bottom line is that soft saving can help make sure you’re using money to enrich all the years in your life, not just the ones that come later.
It helps you live in the moment
Previous generations were told that hard work equals future wealth. And that’s how we ended up with burned-out retirees who are too exhausted after decades of labor to enjoy the time and money they finally have.
A soft saving mindset avoids this trap by helping you make the most of the time you have right now, no matter where you are in life. In other words, soft saving is a reminder that now is the only thing that’s guaranteed. “It signals a generation that sees finances as a tool for building a life, not just accumulating money or assets,” Shellito says.
If you’ve ever found your elders (or yourself) musing about all the exciting experiences that await in retirement, only to realize it’s never actually going to happen, you’ll be on board with soft saving.
It helps prioritize your mental health
If Gen Z is doing one thing better than previous generations, it’s making a commitment to their mental health over work.
If you’re used to living a restricted, frugal life, never enjoying the little pleasures, this mindset could be a healthy way to feel better—today. When you see your mental health as the top priority, you stop feeling guilty about spending money on experiences and opportunities that help you feel like the best version of yourself.
Are there any downsides to soft saving?
There are a few financial and emotional downsides to the soft saving trend, especially if you lose the delicate balance between spending and saving. Here’s what to watch out for:
You can miss out on investment gains
With all the uncertainty in the world, it isn’t a surprise that soft saving is having a moment. “It is a totally understandable response to economic pressure, emotional fatigue and the desire to live well now,” Shellito says.
However, some traditional financial advice rings true no matter how the economy is doing. For instance, money saved in the right account still accrues interest over time. Failing to put any money in savings means losing out on an effortless earning opportunity.
“Easing up too much on savings early in adulthood means missing out on compound growth over time, and that opportunity cost can be significant,” Shellito says.
Let’s say you put $5,000 in an account that earns 4% interest. If you add no additional money, you’ll have $5,200 by the end of a year. In 10 years, you’ll have about $7,400, and in 20 years, your initial investment will be at $10,955. Start adding to the account (say, $100 a month), and you could end up with $46,689 by the 20-year mark.
You might have increased financial stress
Soft saving relies on the philosophy that feeling good today is better than being rich tomorrow. But it doesn’t account for the fact that current financial strain contributes to current stress, especially when a person’s spending habits outpace their earning.
“Financial security contributes meaningfully to peace of mind, so neglecting long-term stability can unintentionally undermine the very wellness people are trying to lean into and protect,” Shellito says.
In other words, if you’re spending beyond your means, you may be worried about your finances while working on your mental health at that wellness retreat.
You may be unprepared for emergencies
Soft saving without a financial cushion could set you up for significant money troubles if something unexpected happens.
“The real trouble starts when there is no emergency fund,” says Michael Benoit, founder of California Contractor Bond and Insurance Services. “One layoff, one injury, one breakdown on the work truck is wiping out their checking account and throwing them into high-interest debt.”
Research shows that Gen Z is already struggling with finances, which has an impact on their social, mental and physical health. A financial hit, combined with a lack of an emergency fund, could seriously exacerbate the issue.
You could overspend for the wrong reasons
There’s nothing like the adrenaline hit of buying a big-ticket item, such as a flight to your top bucket-list location. Yet when you’re spending this kind of money to brag about the trip on Instagram, that can be a slippery slope.
“The key distinction is whether spending is values-based and intentional or driven by social comparison and short-term gratification,” Shellito says.
Overspending as a means to impress other people doesn’t just harm your finances, either. This approach to life can leave you feeling even more empty and insecure.
How can you soft save without harming your financial future?
“The healthiest version of soft saving includes intentional guardrails,” Shellito says.
For example, instead of splurging on a trip that will drain your savings but feels ultra-lux, choose a more modest vacation—after you set up an emergency fund. If you pay your future self first in a high-yield savings account and still have money left over for a fun and memorable experience, you’re soft saving the right way.
“I like to think of it in seasons. It is reasonable to prioritize travel, rest or career flexibility for a period of time, as long as it is done intentionally and doesn’t quietly turn into lifestyle creep that expands with every raise,” Shellito says.
Every six to twelve months, check in with how—and why—you’re spending money. You change over time, and so does the world around you. “Your financial strategy should change in response to that,” Shellito says. “Spend on what aligns with your values and cut intentionally in areas that do not, especially where social comparison shows up.”
Most important, remember that being able to meet your basic needs, and those of your loved ones, is vital to your present and future well-being. That’s how you can soft save in a way that truly feels good.
“The goal is not aggressive saving or carefree spending,” Shellito says. “It is intentional alignment between your present life and your future stability.”
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Sources:
- Bree Shellito, director of financial well-being at Wings Credit Union; email interview, Feb. 23, 2026
- Michael Benoit, founder of ContractorBond.org and president of Pacific United Insurance Services; email interview, Feb. 24, 2026
- Consumer Affairs: “Comparing the costs of generations”
- VCU Research Institute for Social Equity: “Equity Implications of the Unchanged Minimum Wage Since 2009”
- Investopedia: “FIRE Explained: Financial Independence, Retire Early – Rules, Types & Planning”
- Crossover Capital: “The Who, What, Where, When & Why of ‘Soft Saving'”
- Scripps News: “Financial strain harming Gen Z’s life balance and health, survey finds”
- U.S. Securities and Exchange Commission: “Compound Interest Calculator”
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