Splurging on a fancy coffee, a trip to the cinema, or a dinner out can trigger a burst of happiness—that is, before the guilt sets in.
Nearly three-quarters of Americans said they feel guilty when they spend money on things that give them a little joy, according to a new Cost of Life Today report by Ally Bank.
The YouGov survey, which polled more than 5,000 American adults, found that financial pressures are making happiness harder to afford, with the average American adult scoring 54.2 out of 100 on Ally’s “Joy Index,” which measures people’s ability to afford and prioritize happiness, how frequently they experience it, and how resilient it remains under financial stress.
The report comes during a cost-of-living crisis that has squeezed household budgets around the world. In the U.S., home prices have risen around 45% since 2020, while outstanding credit card debt remained at near record highs at $1.26 trillion in the second quarter of this year. Those pressures have intensified as President Donald Trump’s war against Iran has disrupted shipping through the Strait of Hormuz, driving up gas prices and the costs of fertilizers and other commodities.
Affordability appears to be a defining concern for American voters, with both progressive Democratic candidates and Republicans campaigning on promises to lower everyday costs.
Rising costs are creating a squeeze on how much people can enjoy their non-necessary purchases.
Although 68% of respondents report spending on "joy" every month, just 15% said that joyful purchases and experiences are easy to afford, and only 20% said it is easy to afford essential expenses. Seventy-seven percent of respondents said they reduce, delay, or avoid spending on joy at least occasionally because of financial pressures or other priorities. Around 70% of respondents feel stressed at least monthly by balancing joy with financial responsibilities, and 69% feel overwhelmed by financial responsibilities at least monthly.
Women are more likely to experience guilt around spending. Three-quarters of women respondents felt some guilt when spending on personal joy and 25% felt a lot of guilt, compared with 68% and 15% of men, respectively.
Having more money could also bring you more joy. Higher incomes were associated with stronger overall Joy Index scores.
Still, mindset made a difference. Respondents with a “joy mindset” were nearly twice as likely to experience joy at least weekly, and reported experiencing it at virtually identical levels across income groups.
Guilt was also more common among younger respondents. Around 77% of Gen Z and 76% of millennials reported feeling at least some guilt over joy-related purchases. That includes 23% of millennials and 22% of Gen Z who felt a lot of guilt. The report did not specify examples of joyful purchases.
Baby boomers reported the lowest guilt levels, with 63% feeling some amount of guilt. Nearly a third of boomers said spending on joy was “completely worth the cost.” Boomers were the happiest generation, scoring 57.1 out of 100 on the Joy Index. Boomers on average spend the most on joy each month, at $298.
Gen Z came second in terms of happiness, with a score of 55.2. Unlike other generations, a majority of Gen Z respondents—56%—said they have a dedicated budget for joy.
Gen Z respondents reported spending an average of $295 per month on things that bring them joy, compared to $287 among millennials and $259 among Gen X.
When money is tight, 47% of respondents seek lower-cost or free ways to experience joy, while 42% save up before spending. Some make steeper trade offs: 20% cut back on necessities, and 13% take on debt or use credit.
In the previous three months before the survey, 38% of respondents cut back on dining out, 34% on shopping, 27% on entertainment, 25% on travel, and 21% on their hobbies. People were less willing to sacrifice time with or money spent on loved ones. Just 17% cut back on social time with friends, 11% on spending to help others, and 9% on their pets.
For many Americans, luxury looks less like extravagance and more like breathing room. When asked what counts as luxury today, 56% of respondents said vacations. But that was followed by half of respondents who said having money left after paying bills was a luxury. Around 47% of respondents said being able to save and still enjoy life, and eating out without worrying about the bill were also luxuries.
Other luxuries included free time, hobbies, and high-quality groceries.
