Young people warned against ‘soft saving’ trend that’s taking over Gen Z
The older generations have a go at Gen Z a lot these days, and now they're taking aim at a new trend younger people are doing called 'soft saving'.
I do have a bone to pick with certain individuals from Gen Z for calling me a Boomer when I'm from the tail-end of Millennials, but generally we're weathering the same storm of whatever life throws at us.
Millennials went through years of being told we were living life wrong or killing certain industries and now it's your turn, with people picking out the 'soft saving' trend many of you are doing as something to avoid.
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If you've not heard of this, it involves people preferring to spend money on experiences, which they feel boost their personal growth and emotional wellbeing.
That all sounds like a pretty reasonable way to spend one's money, but the problem some people have is that Gen Z are spending their money on this instead of putting cash away for the future.
According to CNBC, a new study of Gen Z in America found that 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.
Travel and entertainment are the two main places the generation's money is going, as younger adults are feeling 'discouraged' at their chances of saving up for the big things in life.
The trend of 'soft saving' would appear to be the opposite of the FIRE (Financial Independence, Retire Early) movement, which involved people being incredibly careful with their cash in the hopes of reaping the rewards later in life.
73 percent of Gen Z would rather have a better quality of life now than put money in the bank for later, and 53 percent of the same cohort say they're finding the cost of living crisis to be a barrier to financial success.
Day-to-day costs are rising along with 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.
Poorer in real terms and with the big things in life more expensive and out of their reach, it's no wonder why Gen Z would see 'soft saving' as a trend to adopt.
Decades of scrimping, saving and planning for a bright future that might never come doesn't seem particularly appealing.
Two-thirds of those who participated 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.
It would be thoroughly miserable to go decades without spending on fun experiences only to realise you can't afford to retire, but some are warning Gen Z they should reconsider and ditch 'soft saving'.
Apparently kids these days need to learn about the wonders of compound interest, with every bit of money you put in now will go on to make more for your in your future.
While it really does pay to pay into your pension, especially if you get your employer to pay in too, it's hard to begrudge Gen Z from wanting to enjoy themselves after growing up in pretty solidly s**t economic conditions all their lives.
It might be wiser to save for the future, but life throws a lot at you and wanting to enjoy it while you've got your youth and health, isn't foolish.
Topics: Cost of Living, Money, US News, UK News
Joe Harker