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A trend has emerged called soft saving, and it's about putting less money into saving for the future and more toward the present.
Looking for a balance between daily living and planning for the future is something that's done every day. But after managing bills, paying down debt, building an emergency fund, and saving for retirement, there may not be a lot of money left. In fact, two out of three Gen Zers aren’t sure they’ll ever have enough money to retire. As a result, many are prioritizing living over working.1
That doesn't mean not to save — in fact it means the opposite. The good news is, the present and future can co-exist. Here's how to be a soft saver, how it can impact finances, and why saving money — and having experiences — both matter.
Soft saving focuses on creating a balance of comfort and low stress to promote personal growth and mental wellness.2 This might mean choosing a job with a better work-life balance, even if it pays less.
Those who prioritize soft saving might spend on:
An important factor is balancing present enjoyment with financial security. Younger people may prefer to experience new things rather than accumulate tangible assets, such as property.
But it may be more than that. According to Consumer Affairs, Gen Z has 86% less purchasing power as they pay proportionately more for essentials, which may impact their ability to save.3
So striking a balance means setting money aside but not being afraid to dedicate a certain amount to things like travel spending and self-care. This puts an emphasis on the importance of mastering personal budgeting.
Those who pursue the soft-saving method still understand the importance of saving money, no matter their priorities in life. Because savings can help to provide a buffer against unexpected expenses while also supporting potential future plans.
When learning how to start saving money, the key is to do it at one’s own pace. Rather than putting away as much as possible, it helps to consider how much is actually needed for bills, as well as lifestyle and other expenses. From there, it may be clearer what can go into long-term savings. It’s also worth having emergency funds set aside for surprise bills, such as car repairs or medical expenses.
When considering a soft saving versus hard saving approach, there are trade-offs to be made on both sides.
Some possible positive effects of soft saving include:
Some possible negative effects of soft saving:
The savings and investment choices made now will ultimately affect the future, so balancing current and future needs is crucial.
For anyone thinking about the soft saving strategy, here are some key considerations:
This entails considering what’s important and what those goals might cost either now or in the future. Some people might prioritize new experiences with friends while others might prefer the sense of adventure that comes with solo travel.
A goal should be SMART — "specific, measurable, achievable, relevant, and time-bound." For example, an individual might set the following SMART goal relating to their emergency fund: “I will save $1,000 for emergency expenses over the next 3 months.”
One way to save is by making it automatic. Rather than thinking about putting aside a certain amount each month and having to make that transfer manually, it’s possible to set up a recurring transfer to automate savings and ensure there’s always money going to the right areas. This helps avoid overspending.
Perhaps one of the most important parts of soft saving is the focus on experiences. This ensures that fun things like concerts, travel, and hobbies are budgeted for.
Putting money aside for courses, training, and coaching will not only feel enriching but can also improve career prospects. This could lead to more flexible work options, a better job, and more career opportunities.
While the focus might be on the now, it’s worth considering what the future might look like. What happens at retirement? Is a big move on the horizon? Is family a priority? Thinking ahead will give some context to what an individual can and should put aside.
PayPal Savings is an easy way to get started with saving. With no minimum amount, no fees, 24/7 access via the app, and FDIC insurance, it’s a great way to start building financial security. Account holders can even set money toward specific goals within their PayPal Savings account — making it easy to allocate funds to long-term aims (like a house fund) or short-term experiences (like a trip).
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