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Saving for the future has always been a core part of long-term financial planning. However, some people are rethinking that approach by focusing more on their present-day enjoyment, needs and personal well-being.
Soft saving encourages people to balance long-term financial goals with spending that supports their mental health, hobbies and quality of life today. The shift is getting attention, especially among younger generations. Understanding how soft savings differs from traditional approaches can help put this growing trend in perspective and see if it’s right for you.
Soft saving is a way of managing money, focusing more on living well today than maximizing long-term savings. It often means using extra income for travel, hobbies and other experiences while still covering basic financial needs and setting aside smaller savings.
Instead of following strict savings goals or aggressive budgeting strategies, soft savers focus on meeting essential expenses, maintaining a basic emergency fund, and saving for retirement (when possible). According to the Federal Reserve, 72% of adults report being at least “doing okay” financially in 2023, but many still reported feeling the impact of higher prices. About 65% of adults say price changes over the past year have worsened their financial situation, making it harder to prioritize some savings goals.
Even with inflation slowing down, the costs of essentials like housing and food remain high compared to just a few years ago. At the same time, many young adults don’t feel confident they can hit traditional financial milestones like buying a home or saving for retirement while dealing with rising student loan balances and concerns about economic stability.
Soft savers want to focus on managing today’s expenses, protecting their mental health by reducing financial stress, and maintaining flexibility with their money.
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Examples of soft saving
Some may see soft saving as a reaction to earlier financial trends like the FIRE (financial independence, retire early) movement, which encourages people to save aggressively and retire decades early. Instead of aiming to maximize savings at all costs, some are choosing to balance saving with living well now.
As soft saving becomes more common, it shows up in a variety of real-life financial decisions. Here are a few soft savings examples:
This shift may reflect how people are adapting their financial habits to today’s realities. Many experience high costs and uncertainties, which may make traditional savings strategies feel less realistic than in the past.
Soft saving can help people manage their finances with less stress, but it can also come with risks if long-term planning is overlooked.
Here are some pros and cons to consider:
Pros
Cons
For many, soft saving is about finding the right balance—supporting your well-being today while still preparing for the future when possible.
Another recent trend that’s been embraced by young adults is Loud Budgeting, and it follows a very different path than Soft Saving.
Read more
When it comes to managing money, the difference between hard saving and soft saving often comes down to goals, structure and flexibility.
Hard saving typically involves setting specific, measurable financial goals, like building a retirement fund, buying a home or paying off credit card debt. These savings are usually tied to long-term milestones and often follow more strict budgeting approaches and timelines. Hard savers may be more willing to sacrifice today to ensure they have enough to meet future needs.
Soft saving, on the other hand, focuses more on balancing financial responsibilities with quality of life. Instead of actively working towards big-picture future targets, soft savers prioritize covering their essentials, setting aside small amounts towards savings and retirement when possible, and spending money on experiences or activities that support their well-being today.
Both approaches have their place. But the choice between hard and soft saving often depends on your priorities and life stage. Some find that it doesn’t have to be an either-or decision; they may adjust their strategy over time to fit their needs and goals as circumstances change.
Soft saving has gained momentum among Gen Z. Many are managing their finances during high living costs, economic uncertainty and shifting priorities around work and life. According to Intuit, 61% of 18- to 35-year-olds are financially stressed, and another 55% say their mental and physical health is tied to their financial well-being.
At the same time, this generation is skeptical about whether traditional financial goals are even realistic or desirable. A recent Harvard survey found that more than 40% of young adults are barely getting by financially. Only 56% feel confident they’ll be financially secure, and about half believe they’ll own a home, get married or have kids someday.
As a result, Gen Z soft saving trends tend to focus more on maintaining financial flexibility, covering immediate needs, and supporting their mental health. For many, the goal is to live well now while building financial stability over time, even if traditional milestones take longer to reach or change altogether.
Soft saving reflects how people, especially younger generations, are adjusting their financial habits to fit today’s realities. Instead of focusing on long-term milestones, many look for ways to balance present-day needs with future goals.
While this approach can offer more flexibility, it’s important to carefully consider how today’s financial choices could impact your long-term financial security.
What is soft saving?
Soft saving is a financial approach focused on balancing long-term financial responsibilities with enjoyment and well-being in the present. It prioritizes covering essentials, maintaining a basic emergency fund, and saving small amounts for the future, while dedicating extra income to support hobbies, travel or experiences that enhance quality of life.
How does soft saving differ from traditional hard saving?
What are the benefits of soft saving?
What are the potential downsides of soft saving?
Why is soft saving popular among Gen Z?
High costs of living, economic uncertainty and shifting priorities around work and life have driven Gen Z to adopt softer saving strategies. Many prioritize financial flexibility, mental health and immediate needs, and they are often skeptical about achieving traditional milestones like homeownership or early retirement.
Can you mix hard and soft saving strategies?
Yes! It doesn’t have to be a choice between one or the other. Balancing both approaches can help meet immediate needs while still preparing for long-term financial security. Adjusting strategies as circumstances change is key.
Is soft saving right for me?
Soft saving may suit individuals seeking to reduce financial stress, focus on mental well-being, or manage today’s expenses. However, consider your life stage, financial goals and capacity for long-term planning to determine the best approach.
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1Cash back can be redeemed in the form of a statement credit or ACH deposit ($25 cash back minimum redemption). Cash back is not earned on business related transactions or activities. You may not redeem cash back, and you will immediately lose all of your cash back, if your account is closed to future transactions (including, but not limited to, due to Program misuse, failure to pay, bankruptcy, or death). Cash back will expire at 11:00 p.m. Central Time on the last day of the calendar quarter that is five (5) years from the date on which they are earned. Account must be open and in good standing to earn and redeem rewards and benefits. Upon approval, please refer to your Cardmember Agreement for additional information. Cash back is earned on eligible net purchases. Net purchases are purchases minus credits and returns. Not all transactions are eligible to earn cash back, such as Advances, Balance Transfers, and Convenience Checks and other advance transactions as defined in the Cardmember Agreement, as well as interest charges and fees do not qualify. U.S. Bank cannot control how merchants classify their business or transactions and reserves the right to determine which Purchases will qualify in which category. Earn 2% per dollar for qualifying net purchases made with the card through any participating AAA Club when AAA is the merchant of record, on qualifying net insurance purchases (MCC = 6300) and at eligible retail travel merchants. AAA Clubs located in Northern California, Nevada and Utah are not participating AAA Clubs and purchases made at those clubs will not qualify for 2%. Earn 4% per dollar for qualifying net purchases on AAA purchases, travel and insurance for your first 6 months up to $6,000. After that, earn cash back in the standard 2% category. Foreign Transaction Fee: None.
2 Benefits are subject to terms, conditions, and limitations on the amount of coverage. Travel and Emergency Assistance Services help in coordinating medical, legal and travel services while away from home. Rental Collision Damage Waiver coverage and peace of mind for damage due to collision or theft of most rental cars. Certain terms and conditions apply. Please refer to your Visa Guide to Benefits for details
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†Annual Percentage Rate (APR). Auto Loans. Rates and terms effective as of 3/7/2025. APR is accurate as of 3/7/2025. Advertised rates and terms are subject to change without prior notice. Additional terms and restrictions may apply. Other loan rates available. Subject to borrower qualification. Advertised rate includes a 0.25% discount when you set up automatic payments from any checking or savings account. Rate is variable. Offer valid on personal vehicle loans only. Criteria to receive the stated APR: Loan term 48 months or less new or used, model years 2019 – 2025 with a credit score of 740 or higher based on the Vantage scoring model. Buyer is responsible for all state or local fees. AAA Banking uses a managed credit program, and final APR is dependent on your credit score. An auto loan with an APR of 5.24% for a $20,000 loan at a term of 48 months, your estimated monthly payment would be $463. An auto loan with an APR of 5.49% for a $20,000 loan at a term of 48 months, your estimated payment would be $465. Private party sales will not be financed. Auto loans are offered by Grasshopper Bank, N.A. Member FDIC.
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3Triple Advantage Savings Annual Percentage Yield (APY) is accurate as of 4/1/2025. The minimum amount to open an account is $100.00. Triple Advantage Savings Account Holders can earn the following Annual Percentage Yield (APY): 3.50% APY with Eligible AAA Membership and 3.15% APY without eligible AAA membership.* Deposit products are offered by Grasshopper Bank, N.A. Member FDIC.
4Triple Advantage Savings account holders with a monthly average balance of $25,000.00 or greater receive free outgoing domestic wire transfers. Triple Advantage Savings account holders with a monthly average balance of $24,999.99 or less will be charged a $10 fee for each domestic outgoing wire transfer.
5Triple Advantage Certificate of Deposit (CD) Annual Percentage Yield (APY) is accurate as of 4/14/2025. The minimum deposit to open an account is $500. 4.25% APY applies to a 6-month CD with balances of $500.00 and up. 4.20% APY applies to a 9-month CD with balances of $500.00 and up. 4.10% APY applies to a 12-month CD with balances of $500.00 and up. 3.95% APY applies to an 18-month CD with balances of $500.00 and up. 3.75% APY applies to a 24-month CD with balances of $500.00 and up. 3.50% APY applies to a 36, 48, and 60-month CD with balances of $500.00 and up. CDs are opened and interest begins on the day the funding deposit is received. The interest rate and APY are fixed for the term of the CD. The APY assumes interest remains on deposit until maturity. Withdrawal of interest before maturity will reduce earnings. A penalty may be imposed for early withdrawal. Fees may reduce earnings on the account. Deposit products are offered by Grasshopper Bank, N.A. Member FDIC.
Early Withdrawal Penalties
An early withdrawal penalty will apply if you withdraw funds before the maturity date. For terms of 6 to 12 months, the penalty is 90 days of interest. For terms of 13 to 60 months, the penalty is 180 days of interest. In accordance with Regulation D, a minimum penalty of 7 days’ simple interest will apply to withdrawals made within 6 days of deposit or within 6 days of a previous withdrawal.
6Triple Advantage Checking Annual Percentage Yield (APY) is accurate as of 4/1/2025. The minimum amount to open an account is $100.00. Triple Advantage Checking Account Holders can earn the following Annual Percentage Yield (APY): 1.00% APY with eligible AAA membership and 0.75% APY without eligible AAA membership.* Deposit products are offered by Grasshopper Bank, N.A. Member FDIC.
7Cash Back rewards offer 1.00% cash back on all qualified purchases made by eligible Triple Advantage Checking account holders with an eligible AAA membership.* To qualify for cash back, Triple Advantage Checking account holders must meet all requirements and a transaction must be deemed as a qualified purchase.
Qualified purchases are signature-based purchases made with a AAA Banking debit card from a Triple Advantage Checking Account. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and how the transaction is transmitted to AAA Banking at the time of processing. AAA Banking reserves the right to determine if a transaction was a qualified purchase, and to establish additional types of qualified purchases that could be made available in a variety of ways. Any goods or services purchased with the debit card that are returned or otherwise credited to the account are not qualified purchases. Unlawful purchases and purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, travelers cheques, gift cards, cryptocurrency, casino chips, peer-to-peer payments, prepaid debit cards, account openings, loan payments, or other cash equivalents) made with a debit card are not qualified purchases. Documentation may be required to validate that certain purchases are qualified purchases. If you or AAA Banking closes the account for any reason before the end of the statement cycle, you will forfeit all rewards accrued through your linked debit card during that statement cycle. The AAA Banking Visa® debit card is issued by Grasshopper Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa is accepted.
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The value of this reward may constitute taxable income and may be reported to the Internal Revenue Service as miscellaneous income to the first signer on the account, in the year received, as required by applicable law. Offer is limited to clients who are citizens of the United States that furnish or have a valid Form W-9 on file and the account must not be subject to backup withholding.You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. Please consult your tax adviser, as AAA Banking does not provide tax advice.
*Eligible AAA Membership Definition: you must be a "Basic," "Plus," or "Premier" member of AAA - The Auto Club Group (ACG). ACG serves households in Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, New York, North Carolina, North Dakota, South Carolina, Tennessee and Wisconsin. Applicants must be 18+ and a U.S. resident. Other AAA memberships are not eligible.
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