In a recent Prosperity Index study conducted by Intuit, it has become evident that the younger generation, also known as Generation Z, is embracing an alternative approach to securing their long-term financial well-being.

This new trend, termed “soft saving,” emphasizes living in the present with a reduced focus on early retirement or retirement in general.

The current economic climate has shaped the financial mindset of adults aged 18 to 25.

Rather than fixating on early retirement, they are more inclined toward experiences that foster personal growth and emotional well-being, according to the report. In essence, they are choosing to savour life’s moments, a notable departure from previous generations’ financial objectives.

Defining the ‘Soft Saving’ Trend

The “soft saving” trend, often described as the financial counterpart to a more relaxed lifestyle, has started to gain traction in today’s economy. It offers a different perspective than the previously popular FIRE (Financial Independence, Retire Early) movement, which advocated efficient money management to achieve financial freedom.

However, accumulating sufficient savings for early retirement has become increasingly challenging, especially for younger adults entering the workforce.

Challenges in the Financial Landscape

The younger generation faces discouraging factors in their pursuit of financial security. Ted Rossman, a senior industry analyst at Bankrate, points out that rising inflation rates have added to the difficulties encountered by those just starting out. Notably, over 53 percent of Gen Zers identify the high cost of living as a major barrier to their financial success, as indicated by a separate Bank of America survey.

In addition to soaring costs of essentials like food and housing, millennials and Gen Z face financial hurdles that their parents did not encounter in their youth. These include lower wages compared to their parents during the same life stage and larger student loan debts to repay.

The Hesitation to Set Long-Term Financial Goals

Approximately three-quarters of Generation Z Americans express reservations about establishing long-term financial goals within today’s economy, according to the Intuit study. Moreover, two-thirds of them question if they will ever amass enough savings to retire comfortably.

Prioritising Quality of Life Over Savings

In contrast to traditional wisdom, 73 percent of Gen Zers opt for a better quality of life over amassing extra savings by reducing expenses. This preference reflects a shift in values and priorities, highlighting their desire to live a fulfilling and well-rounded life.

According to Bankrate’s findings, Gen Z workers comprise the largest segment of nonsavers, underscoring the financial challenges and unique perspectives that define this generation.





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.