Making Cents: Is the soft saving trend a good financial idea?
A financial trend may be good for your current mental health but it’s likely not a good idea for future savings.
It’s called soft saving and financial expert Kathryn McCall isn’t a fan.
“This is a ‘live for today’ mindset in which we prioritize emotional well being and current quality of life over the corporate hustle and getting ahead. I think this trend is in response to unattainably high housing prices, major inflation the last few years and other traditional milestones that Gen Zs view as out of reach,” says McCall.
It’s the exact opposite of another recent financial trend, moneymaxxing, that McCall endorsed.
<img src="https://kubrick.htvapps.com/htv-prod/images/afaecb10-5fef-4fee-a27b-9716a42d2f15.jpg?crop=0.940xw%3A1.00xh%3B0.0309xw%2C0&resize=136%3A*" alt="What is ‘moneymaxxing’ and should I do it?” title=’Frugality is in, and “moneymaxxing” is a Gen Z trend personal finance experts can get behind.’ loading=”lazy”>
Making Cents: What is moneymaxxing, and should I do it?
Moneymaxxing is the viral Gen Z trend that gamifies frugality through things like credit card point strategies and budget optimization.
McCall says, “This trend more or less normalizes minimal saving or just enough for an emergency fund and pulling back heavily on retirement contributions, just focusing on daily small dollar savings. I think from a societal standpoint this trend is a symptom of an affordability problem with this generation.”
McCall points out National Association of Realtors statistics show GenZ accounts for only 4%-5% annual home purchases and that roughly 80% of those GenZ’s buying a home received financial help from family.
“This trend continues make home ownership feel unattainable for those who are saving without the help from their family. To put another way, soft saving feels a lot more like YOLO (you only live once), which is all well and good until you are 70 and can’t afford to retire,” cautions McCall.
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