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<\/p>\nA new trend of 'soft saving' has been sweeping across Gen Z, according to new research.<\/p>\n
If you haven't heard of the term before, 'soft saving' is when people spend money on experiences, which they feel boost their personal growth and emotional wellbeing. And it seems like a lot of younger people are doing this instead of putting money away for the future.<\/p>\n
According to CNBC, a new study of Gen Z in America found the fresh crop of adults aged between 18 and 25 were spending money on the here-and-now, instead of putting it aside in hopes of an early retirement. And it's likely to be the same here in Blighty.<\/p>\n
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Travel and entertainment are the two main places the generation's money is going, as younger adults feel 'discouraged' at their chances of saving up for the big things in life.<\/p>\n
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The trend of 'soft saving' is the opposite of the FIRE (Financial Independence, Retire Early) movement, which involved people being very careful with their cash in the hopes of reaping the rewards later in life.<\/p>\n
According to the study, 73% of Gen Z would rather have a better quality of life now than put money in the bank for later, and 53% say they're finding the cost of living crisis to be a barrier to financial success. Day-to-day costs are rising, as well as the price of major life purchases like housing, while young adults are having to deal with their wages being lower in real terms than their parents.<\/p>\n
With all of this, it's not hard to see why the 'soft saving' trend is being favoured by the young as decades of scrimping and saving for a bright future that might never come doesn't seem very appealing.<\/p>\n
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Two-thirds of those who took part in the study said they worried they wouldn't have enough money to retire anyway, while in some countries the prospect of the pension age being raised makes it an increasingly distant prospect.<\/p>\n
Despite this, Gen Z are being warned to reconsider and ditch 'soft saving', according to LadBible and told they need to learn about the wonders of compound interest. This involves making money on everything you put in now to pay for your future.<\/p>\n
Maybe the best approach is to combine both and get the best of both worlds!<\/p>\n