‘Soft saving’: How Gen Z are building nest eggs without ditching morning coffee and avocado toast

Social media is rife with saving trends - the important thing is finding one which works for your lifestyle and needs

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Younger generations are ditching the idea that scrapping takeaway coffees will help them build a savings habit.

Rather than going without small pleasures such as coffee runs or streaming subscriptions, younger savers are favouring more flexible approaches to putting money aside, known as soft savings.

It comes as research by savings nudge app Marygold & Co revealed that 38 per cent of Generation Z - those currently aged 13 to 28 - claim their financial circumstances shift each month and a third (34 per cent) admit their goals change monthly, often depending on their emotions.

This means the rigid, traditional method of saving a fixed amount each month may not work for some young people, especially with inflation remaining high and unpredictable.

Matthew Parden, chief executive of Marygold & Co, said: “Saving habits across the UK have become more fluid - younger earners in particular are managing money in a way that adapts to changing income, lifestyle and motivation, rather than sticking to rigid monthly targets.”

But soft savings may be a solution.

What are soft savings?

Soft savings prioritises flexibility, where you don’t have to worry about having a set amount put aside each month and can enjoy your younger years.

Instead, small amounts are saved regularly using tools such as apps that let you round-up your spare change and naming savings pots to provide a purpose.

A soft saver doesn’t spend recklessly, but also doesn’t feel guilty about small pleasures - such as the stereotypical avocado toast associated with younger generations.

Mikolaj Figarski, 20, from London, is a proud soft saver. He earns around £25,000 working as an assistant at co-working space SoHo Works. Mikolaj gets paid weekly and sets aside up to £500 each month, dividing it into simple savings pots for rent, travel, and bigger goals such as buying a motorbike or upgrading his computer.

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But he also isn’t afraid to dip into the money when he needs the cash.

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He told The Independent: “The concept of soft savings works for me because it suits my lifestyle. I get paid weekly, so every Friday I move a small amount into different pots for rent, travel, and things I’m working towards.

“I aim for up to £500 a month, and I’m fine rearranging funds when I need to. I’ve got two pots as backup and I use cashback gift cards to stretch my spend. Getting paid weekly helps me keep the habit without feeling strict, and seeing those pots grow makes me feel in control.”

How to be a soft saver

A soft saver automates everything so once it is set up it can be forgotten about.

Apps such as Marygold & Co and Plum can connect with your bank account and recommend how much you can afford to save each month while others such as Moneybox will round up spare change or automatically transfer small amounts into savings, meaning you’re building a cushion without feeling the pinch.

Parden said: “You won’t miss the 37p, but you’ll notice when it becomes £370.”

Dividing your savings into different money pools such as for emergencies, fun and long-term plans can create a clear purpose and make it easier to stay disciplined without feeling restricted.

Anita Wright, chartered financial planner at Ribble Wealth Management, said: “If savings happen automatically, you don’t have to choose every month so default beats willpower.

“Progress feels good - watching named pots grow such as a holiday or wedding fund, builds a saver identity.”

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Ways to boost your savings

Some soft savers take on a side hustle such as selling items online or pet sitting to boost their savings.

It is also worth being savvy about how you spend your money. Cashback websites such as Quidco and discount apps including Vouchercodes can help you reduce spending without cutting back on enjoyment.

There are risks to this approach though.

Eamonn Prendergast, chartered financial adviser at Palantir Financial Planning warns that convenience can breed complacency.

He said: “if you ‘set and forget’ without reviewing what you’re actually building towards, you risk saving too softly and too slowly. The best approach is balance: use automation to build discipline, but check in regularly to make sure the amounts align with your real goals. Think of it as putting your savings on autopilot - but you still need to be the pilot.”

Wright added: “Automation can backfire if your income fluctuates and you have a thin month. A £50 round-up won’t fund a £1,500 emergency. Set target-backed amounts and automation to a goal. Also a fixed round up can bite when income varies. Use percentage-based round ups. Don’t set it and completely forget it – review each pot quarterly.”

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