Stories
Decoding ‘Funflation’: Why Consumers Keep Spending on Hobbies Despite Rising Costs
- •‘Funflation’ refers to the rising cost of leisure activities, entertainment, hobbies, and travel, making enjoyment more expensive.
- •Despite increased prices, consumers are not stopping their spending on fun, with hobby spending rising significantly year-on-year.
- •Bank of America analysis shows hobby spending increased 7.9% year-on-year in August 2026, more than doubling the increase in transactions.
- •Consumers are adapting to ‘funflation’ through substitution, opting for more affordable activities like hiking, camping, or at-home hobbies instead of costly foreign holidays.
- •Older millennials are spending the most on hobbies, while Gen Z shows a 20% rise in per-person spending on video games, indicating a shift towards more accessible forms of entertainment.
Key Questions Answered
Funflation refers to inflation for leisure, representing the rising cost of entertainment, hobbies, travel, and recreation. Despite these higher prices, consumers are continuing to spend on fun by shifting their purchasing habits rather than eliminating activities altogether.
According to a Bank of America analysis, spending on hobbies rose by 7.9 per cent year-on-year in August 2026. Furthermore, US Census Bureau data revealed that sales at sporting goods, hobby, musical instrument, and book stores increased by 10.7 per cent over the same period.
Bank of America data showed that older millennials spent the most on hobbies during the three months through August, spending more than twice as much per consumer compared to Gen Z. Meanwhile, Gen Z recorded a 20 per cent rise in per-person spending on video games.
