If you have a TikTok account, you may have heard of a new financial trend called soft saving. It’s popular with Gen Z and involves embracing financial balance. Instead of pressuring themselves to save aggressively for lofty goals like early retirement, soft savers aim to enjoy a high quality of life now. Their goal is to balance saving for the future with spending on meaningful experiences that bring them joy in the present.
Financial experts agree that it’s beneficial to spend a portion of your income on things that make you happy. However, it’s important not to go overboard and YOLO your savings on international travel or skimp on your retirement contributions. Here are 4 ways to practice the soft saving trend responsibly so you can reduce money-related stress, enjoy your life now, and have a secure financial future.
Practice the 50/30/20 Rule
Practicing the 50/30/20 rule is a great way to strike a balance between enjoying today and saving for tomorrow. This guideline suggests that you spend 50% of your income on your needs such as housing and food.
Then you can allocate 30% of your take-home pay to wants like eating out, and save the remaining 20% for future goals like retirement. This financial rule of thumb allows you to indulge some of your wants without compromising your current or future needs, which is what soft saving is all about.
Automate Your Finances to Reduce Stress
Another important aspect of soft saving is reducing money-related stress. One way you can do that is by creating financial systems that make managing your money easier. For example, putting your bills on autopay ensures that you never have to worry about missing payment deadlines and racking up late fees.
You can also automate your savings by setting up a recurring money transfer from your checking account to your savings account on payday. Doing this will enable you to pay yourself first and prioritize your savings goals automatically without expending any mental energy.
Additionally, many people find that setting up multiple bank accounts makes budgeting less stressful. If you mingle your bill money and discretionary income in one bank account, it can be hard to tell how much you can spend while staying on budget. Setting up separate bank accounts for savings, bills, and discretionary income will make it easier to keep track of your money and achieve your financial goals.
Set Realistic Financial Goals
Another important element of the soft saving trend is setting realistic financial goals. Aiming for unrealistic savings targets can cause you to feel stressed out and discouraged. For example, if you earn $50,000 per year, saving 50% of your income for early retirement may not be possible. Instead of focusing on goals that are out-of-reach, it may be better to start smaller and follow a a realistic guideline like the 50/30/20 rule.
Setting achievable financial goals will make you feel empowered and in control of your money. Plus, you won’t have to burn yourself out by picking up lots of gig work or overtime to meet your savings targets, allowing you to enjoy a softer lifestyle.
Save Money on Experiences
The soft saving trend involves prioritizing experiences, but that doesn’t mean you need to spend a lot of money to make memories. Websites like Groupon and Living Social can help you score discounts on restaurant meals, classes, tours, museum tickets, and more.
You can also earn cash back on dining out and travel purchases by getting a rewards credit card and using it responsibly. Paying off your balance at the end of the month will enable you to rack up rewards points without getting charged interest. Redeeming your points for hotel stays or restaurant gift cards will help you stretch your fun money budget further.
What do you think of the soft saving trend? How do you achieve financial balance in your own life? Share your thoughts and tips in the comments!
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.
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