Are They Trading Future Security for Present Comfort?

“Soft saving”—prioritizing present enjoyment over aggressive retirement planning—is replacing the acronym FIRE (financial independence, retire early) for many young Americans. Instead of sacrificing today for tomorrow’s nest egg, they’re putting their mental health and present well-being first.

More than 40% of young Americans say they’re “barely getting by” financially, while just 16% report doing well or very well, according to a 2025 Harvard Public Opinion Project survey of 18- to 29-year-olds. While a strong majority (86%) of young Americans say financial stability is important, only 56% feel confident they will achieve it.

“This is a generation that’s weathered pandemic isolation during formative years, entered an unstable economy, and faced skyrocketing housing and education costs—all while being told they’re not resilient enough,” John Della Volpe, director of polling at the Harvard Kennedy School Institute of Politics, said in a press release about the poll. “What Gen Z needs isn’t another lecture, but genuine recognition of their struggles.”

What Is Soft Saving?

Soft saving is about consciously choosing present enjoyment—such as travel, social experiences, and mental health—over saving aggressively for the future. Unlike FIRE, which emphasizes extreme saving in the interest of early retirement, soft savers aim to feel financially and emotionally satisfied in the present, saving only what’s left after their current needs are met.

This trend reflects not only shifting generational priorities but also a calculated response to skyrocketing housing costs, crushing student debt, and economic uncertainty, which have forced many young adults to redefine what financial success means for them.

Nearly three-quarters (73%) of Gen Zers said they would rather have a better quality of life than extra money in the bank, according to a 2023 Intuit (INTU) survey. The same percentage said the current economy makes them hesitant to set up long-term goals, and 66% of Gen Z said they’re not sure they’ll ever have enough money to be able to retire.

That level of uncertainty is part of what’s driving soft saving. While 42% of Gen Zers say they’re motivated to plan for their future given global events, a greater number (48%) say global challenges make them want to “live for today” instead, according to a 2024 TIAA survey.

That doesn’t mean Gen Z is financially irresponsible. In fact, 84% report setting aside a portion of their paycheck each month, and 57% say they stick to a budget. But rising living costs—particularly housing, which consumes about half of Gen Z’s monthly budget on average—along with higher student debt and job market volatility, make it difficult to save more. Only 20% of Gen Zers are saving for retirement, according to the TIAA survey. That matters because the sooner you start saving, the more time your money has to grow through the power of compound interest.

Nate Hoskin, the founder and lead financial advisor for Hoskin Capital, predicts that eventually Gen Z’s attitudes toward saving will mirror those of millennials. “Millennials were the Gen Z before Gen Z—a generation without savings or retirement plans,” he said. “Then over time, they grew into one of the best savings generations we’ve ever seen, despite limited governmental support and fewer robust employment opportunities that earlier generations, like the Baby Boomers, benefited from.” 

Zooming out, Gen Z’s finances reflect broader shifts in attitudes about saving and retirement. The U.S. personal saving rate was 4.6% in February 2025, lower than the average saving rate of 8.41% from 1959 to 2025. Meanwhile, 58% of Americans across generations say they’re not sure they’ll ever have enough to retire.

Benefits of Soft Saving

• Mental well-being: By investing in present well-being, young adults are addressing immediate mental health needs rather than deferring happiness.
• Flexibility: Soft saving can create breathing room for career experimentation, skill development, and personal growth without the pressure of meeting arbitrary milestones, such as buying a home by 30.

Pitfalls of Soft Saving

• Retirement shortfall: Living in the moment can come at the cost of future security. For young adults, skipping early contributions could leave decades of savings, including the effects of compounding, off the table. Hoskin advises Gen Z to view savings as a way to maintain control over their finances amid the chaos of daily life. “Even putting just $20 a week in a Roth IRA helps you regain control of one variable, grounding you in the present,” he said. “It ensures you’re keeping up with inflation, and creates a sense of accomplishment rather than just saving for some vague, distant goal.”
• Lack of emergency savings: While mental well-being is vital, so is financial preparedness. For example, the average American incurs over $1,100 in annual out-of-pocket medical expenses, which helps highlight why financial experts recommend having an emergency fund of at least three months’ worth of income.
• Lifestyle creep: Spending-first habits can be hard to reverse. As income grows, so might your expenses, making it more challenging to return to a savings mindset later on. “People can fall into a negative feedback loop, spending as quickly as they earn because saving isn’t ingrained in their behavior,” warns Mark McGrath, a financial planner for PWL Capital. “This leads to a retirement cliff, where a much larger retirement portfolio is needed to sustain their lifestyle. The sudden adjustment from a high-spending lifestyle to a retirement budget can be a severe shock — and often proves unsustainable.”

The Bottom Line

Soft saving is about prioritizing quality of life and happiness today, instead of saving aggressively for tomorrow. It reflects Gen Z’s response to a level of economic uncertainty that has made planning for the future seem more difficult and made retirement seem out of reach for many.

But by balancing intentional present-day spending with smart debt management and modest but consistent investing, young adults can nurture their immediate happiness while still building future security.