Although the high cost of living has been slowing average U.S. households in discretionary spending and leisure spending in recent years, a recent study developed and published by the Bank of America Institute revealed that a portion of the population still spends money on their hobbies, despite facing higher prices to enjoy them.
According to the research, during the month of August there was a 7.9% year-on-year increase in leisure spending, although it is a higher increase than recorded during the pandemic this could be related to what the researchers called “inflation of fun”, as U.S. consumers are currently paying more for doing the same activities.
According to researchers at the Bank of America Institute, millennials are the ones who so far show a higher hobby spending followed by baby boomers and Generation X, while Generation Z is more cautious as to what their budget is.
The analysis highlights that the reason millennials spend more is because it’s the generation that probably has young children, so their spending on leisure is not only their own but also their children’s.
Moreover, a survey conducted by YouGov for Ally Bank to more than 5,000 U.S. adults revealed that at least 70% of respondents felt guilty of spending on some activity that produced joy instead of saving for their long-term financial goal.
The research shows that discretionary spending, leisure or leisure spending among Americans is not only seen as a luxury but from guilt. This led the researchers to determine that part of the reason why in Ally Bank’s “Happy Index” U.S. consumers achieved a score of only 54.2 out of 100.
“An important part of the population is even cutting out spending on basic needs to allocate that money to the areas they value the most. It’s not about people spending out of control, it’s about spending to protect something they’ve decided they can’t afford to lose,” says Lee Stafford, chief economist at Ally Bank and co-author of the inaugural “Cost of Life Today” report.
