How Young People Are Changing Their Approach to Saving Money

Millennials and Gen Zers are rethinking traditional approaches to saving money and retirement planning. A new trend called "soft saving" is emerging, focused more on enjoying life in the present rather than aggressively saving for the future. 

This shift reflects how economic conditions have changed for young people. With stagnant wages and soaring costs of housing, healthcare, and education, it's tougher for Millennials and Gen Z to save at the same rate as previous generations. At the same time, retirement feels further out of reach. 


Less Focus on Retirement Goals

Past personal finance advice emphasized maxing out retirement contributions as early as possible. But for young people today, retirement can feel like a distant milestone. 

Instead of viewing their 20s and 30s as a time to pile up savings, Millennials and Gen Zers are adopting a more balanced approach to money. This means spending on experiences that enrich their lives now, whether it's travel, hobbies, pets, plants, fitness goals, or further education.


Focusing on Overall Wellbeing 

For previous generations, success often meant having a high income and amassing wealth. But many young people today prioritize their mental health, relationships, and personal growth over money itself. 

This ties into the "soft saving" movement. Rather than denying themselves leisure and happiness now in pursuit of future security, Millennials and Gen Zers see value in spending money in ways that support their overall wellbeing.


Making Room for Flexibility

By taking a more balanced approach to spending and saving, young people are building financial flexibility into their lives. This gives them room to pursue new opportunities and weather unexpected setbacks.

For example, putting some earnings towards travel, hobbies, or education can open doors professionally. And maintaining an emergency fund helps cope with sudden expenses like medical bills or car repairs.  


Tailoring Personal Finance to Their Realities

Ultimately, Millennials and Gen Z are shaping their money habits around their economic realities and personal values. Instead of single-mindedly chasing retirement, they're taking a more holistic view of finances. 

This new attitude toward money and saving offers valuable lessons for achieving balance, flexibility, and wellbeing in personal finances. While the old model of aggressive retirement saving works for some, many are finding success by crafting spending plans tailored to their own situations and goals.