The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
If you’ve ever decided to save less cash in your retirement account so you could do more traveling or support an expensive hobby, you might be “soft saving” (and not even know it).
Soft saving is about choosing to spend money on things you enjoy today and stashing money away less aggressively for your later years. People who take this approach are more concerned about what they’re doing tomorrow than what they’ll be doing at age 65 or 70.
“Soft saving is being more mindful about your lived experience now and not being willing to sacrifice too much in favor of your future yet,” says Rebecca Palmer, a certified financial planner in Washington, D.C., and head of guidance for financial planning platform Fruitful. “So, the balance between prioritizing future you versus current you.”
Is soft saving new?
While revenge saving has gotten more attention recently, soft saving isn’t a new phenomenon — for years, people have chosen current wants over elevated saving for future needs. But today’s soft saving trend is a purposeful mindset shift.
Jesica Ray, a certified financial planner with Brighton Jones in Washington, D.C., recently talked to a young client who didn’t want to focus on retirement savings. “They said, ‘I’m not going to do that because I don’t really care what’s in that bucket when I’m 50 years old, I care about using that money now and knowing it’s not tied up in some retirement account that I can’t access until I’m 59,’” Ray says.
Soft saving is often attributed to Gen Zers who’ve watched their parents navigate strict rules around money and budgeting — and they don’t want to take that same approach.
“I really felt allergic to this idea of budgeting when I was getting my own financial life together,” says Nicole Lapin, a Los Angeles-based financial expert, author and host of the “Money Rehab” podcast. “It felt really scary. It felt like, ‘Wow, I can’t have any fun.’ Where are the extras?”
The pros and cons of soft saving
In some cases, soft saving serves as a gentle entry to a consistent savings habit, which can be a boon for people feeling anxious about how to approach financial planning.
“Soft saving invites people to just start,” Palmer says. “It does need to be consistent for it to work, though. It can’t be just, ‘Oh, I’ll save a little when I want to.’ Consistency here is really important so it can be increased later.”
One disadvantage, however, is that if your savings rate is smaller as a person in your 20s, it may be tough to boost it in your 40s — especially if you’ve experienced lifestyle creep and have more financial obligations like a mortgage and children….
Read More: Is ‘soft saving’ smart — or shortsighted?
