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Gen Z leans into soft saving, less focused on retirement

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Soft saving gains steam in today’s economy

Younger adults feel discouraged.

Ted Rossman

senior industry analyst at Bankrate

In addition to soaring food and housing costs, millennials and Gen Z face other financial challenges their parents did not as young adults. Not only are their wages lower than their parents’ earnings when they were in their 20s and 30s, but they are also carrying larger student loan balances.

Roughly three-quarters of Gen Z Americans said today’s economy makes them hesitant to set up long-term financial goals and two-thirds said they might never have enough money to retire anyway, according to Intuit.

Rather than cut expenses to boost savings, 73% of Gen Zers say they would rather have a better quality of life than extra money in the bank.

Gen Z workers are the biggest cohort of nonsavers, Bankrate also found. 

“As a wealth advisor, my radar goes up,” Kara Duckworth, managing director of client experience at Mercer Advisors, said of recent consultations with young clients.

Many would rather spend their money on an extended trip, she said, than pad a savings account.

But “first and foremost, do you have an emergency fund?” she asks such clients.

Most financial experts recommend having at least three to six months’ worth of expenses set aside. If that seems unrealistic, consider saving enough to cover an emergency car repair or dentist bill, Duckworth advised. “You need to have at least some amount of liquid assets.”

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