Three quarters of Gen Z would rather have a better quality of life than extra money in the bank, study shows – but what are the risks?

Nearly three in four Gen Z Americans would choose a better quality of life over extra money in the bank, a new survey shows.

This is evident from a report by the financial technology platform Intuitive73 percent of people between the ages of 18 and 25 would rather use their money to improve their lives in the present than save it for the future.

This so-called “soft savings trend” is “soft living’s answer to finances,” the report said. A ‘soft life’ is a lifestyle that prioritizes comfort, low stress and well-being.

“It’s all about personal growth and mental well-being in the now, and they would rather feel more fulfilled now than save for a future that is unknown,” the study reads.

Intuit found that 2 in 3 Gen Z Americans are only interested in finance as a way to support their other interests in life – compared to 61 percent of the general population.

Young people are more likely to embrace a “balance between the traditional ‘hustle’ to save every penny and use some of their extra income to enjoy life now,” Ryan Viktorin, vice president of financial advisor at Fidelity Investments, told me. CNBC.

According to the survey, 73 percent of Generation Z Americans say the current economy makes them reluctant to set long-term goals. This is compared to 63 percent of the general population.

It found that Generation Z and Millennials (aged 26 to 41) were more willing to spend money on non-essential purchases and hobbies than older generations.

About 40 percent of Generation Z and 47 percent of Millennials said they needed money to pursue a passion or hobby, compared to 32 percent of Generation X and 20 percent of boomers.

The study classified Gen

The survey found that 37 percent of Generation Z and 45 percent of Millennials said they needed money to make non-essential purchases — while only 31 percent of Generation X and 25 percent of Boomers expressed the same need.

Personal savings rates appear to reflect this increase in the ‘soft savings’ trend.

According to the latter facts from the Federal Reserve Bank of St. Louis, Americans will save less in 2023.

The personal savings rate — the portion of disposable income that Americans put aside for savings — was just 3.9 percent in August, compared to an average of 8.51 percent over the past decade.

The survey found that 73 percent of people aged 18 to 25 would rather use their money to improve their lives in the present than save it for the future.

But experts warn that young people should not lose sight of saving for the future.

“Spending money on things that actually make you happy is great,” Andy Reed, head of investor behavior at investment firm Vanguard, told CNBC, “but people need to satisfy their short-term needs and stay on track with their long-term goals before spending freely.”

The Intuit survey found that two in three Generation Z people said they were unsure they would ever have enough money to retire.

And separate research found that more than half of working Americans feel like they’re falling “behind” on their retirement savings — which could significantly slow them down later in life.

Rampant inflation and higher interest rates are undermining workers’ ability to save for their senior years, raising fears of a nationwide “retirement crisis.”

The latest research from the personal finance website Bank rate found that about a quarter of Americans had not made pension contributions for at least a year.

Meanwhile, one in three said they felt ‘significantly behind on their retirement savings’.