Americans can afford a little fun. They just don’t seem all that comfortable paying for it.
Almost three-quarters of U.S. adults feel guilty when they spend on things that bring them joy instead of putting the money toward a financial goal, according to a report from Ally Bank.
The issue isn’t necessarily runaway spending. Just 6% say they devote too much money to leisure—including time with family and friends, hobbies, pets and opportunities to recharge—while 68% believe they allocate about the right amount.
But at a time of anxiety about inflation, expensive housing and economic uncertainty, even modest indulgences can come with a dose of unease. While a night out, a weekend trip or a new hobby may fit comfortably within the budget, that money could also go toward paying down debt, building an emergency fund or saving for retirement. It’s a marked shift from the post-pandemic “YOLO” economy, where people were prioritizing spending on joy and experiences as opposed to saving for their futures.
Consumers are weighing the opportunity cost of every expense, said Jack Howard, head of money wellness at Ally. “That can turn even a perfectly reasonable purchase into an internal negotiation and shame spiral about what you should have done with that money instead,” she said.
The Ally research, conducted by YouGov in July, included responses from more than 5,000 U.S. adults who have some role in household financial decision-making.
Petra Buchanan, 53, describes herself as “pathologically guilt-ridden” about spending. She’s always been frugal, but these days she’s even more conflicted about opening her wallet.
“My insurance has tripled in the last three years. My car insurance has gone up, food has gone up. It’s just wild,” said Buchanan. “I’ve become so disciplined about money and I still feel so on the edge a lot of the time.”
Earlier this year, Buchanan spent $250 on two sheep to graze the grass on her property in Mendocino County, California. She said the animals have brought her “tons of joy” and even helped drum up business for her Airbnb. Still, she sometimes wonders whether she should have bought them at all.
“I’m not going into debt for any of this, but I feel like I could also have more money in my retirement account,” she said. “Part of me thinks I just need to live this completely restrictive life.”
Buchanan isn’t alone in that internal negotiation. About 70% of respondents say they’re stressed about balancing financial responsibilities with enjoying life, with 77% saying they sometimes cut back, delay or forgo things they enjoy because of financial pressure or competing priorities. Continued consumption doesn’t mean people are carefree about it, according to Ally’s Howard.
That tension is also shaping how Americans weigh today against tomorrow. Some 54% try to balance long-term financial goals with present-day enjoyment, even if it slows their progress. Another 27% prioritize their financial future at the expense of present-day fun, while just 8% put experiences today ahead of longer-term goals.
Alexander Woo, a 34-year-old in Tampa, Florida, falls closer to the save-for-later camp. He said he’s long lived frugally, and while his finances have improved, he’s struggled to loosen the purse strings with grocery, utility and gas bills rising and the job market remaining a concern.
“Even though I’m trying to feel more comfortable spending, I’m seeing the economy itself make it harder for me to justify it,” Woo said. “It feels like it’s a little harder to make progress financially or climb the ladder.”
For Danett Vargas, 23, the trade-off meant giving up trips to see the South Korean boy band BTS and singer-songwriter Noah Kahan. After reviewing her paychecks and adding up the cost of flights and accommodations, she decided she couldn’t justify the expense and resold her concert tickets.
“The math wasn’t adding up,” Vargas said. The freelance photographer in Greenville, South Carolina, said she’s been cutting back on coffee and expensive dinners with friends and shopping at cheaper grocery stores like Aldi and Costco as she saves toward her long-term goal of moving to a bigger city like New York or Los Angeles.
Still, guilt isn’t stopping Americans from spending altogether. More than two-thirds say they devote money to things that bring them joy at least monthly, though just 39% have a dedicated budget for it, according to the Ally report. Older Americans, who have had more time to accumulate wealth, are more likely to see those purchases as completely worth the cost, while 32% of Baby Boomers and older adults say so, compared with 29% of millennials and 27% of both Gen X and Gen Z.
Cara Matthews, 42, has found one way to quiet the internal debate. She and her husband each set aside $150 in “fun money” every month. Having cash explicitly earmarked has helped them spend on things like pedicures or golf with fewer second thoughts.
It’s about balancing “delayed gratification with the YOLO mindset,” Matthews said.
This article was provided by Bloomberg News.