Millennials Willing to Spend $7 on Coffee Because It Makes Them Happy

Millennials aren't willing to ditch their daily coffee beverages, and they don't care if it costs them $7 a day.

That's the latest from a new Empower research report that found 62 percent of millennials would spend $7 a day, or $210 a month, to fuel their coffee cravings because it brings them joy.

The cost of a $7 coffee a day ends up amounting to a whopping $2,520 a year, but millennials remain committed to their neighborhood Starbucks or local coffee shop because it makes them happy, the report found.

"The phenomenon of trading financially sound decisions for short-term joy is quite common among millennials and Gen Z, especially during these stressful times," Reid Litman, the global consulting director for Ogilvy and a Gen Z and millennial expert, told Newsweek.

Litman said the younger generations engage with a "little treat" culture that's become prominent on TikTok. Many young people will justify their small purchases because they "deserve a little treat," Litman said.

"One girl in a recent article I read even said, 'Even though a pumpkin spice latte isn't exactly like a trip to Greece, the emotional reward is the same,'" Litman said.

Americans Think Money Can Buy Happiness

The majority of Americans, or 59 percent, said money can indeed buy happiness in the survey, but millennials and Gen Z were far more likely to say finances are integral to life happiness than their elders at 72 and 67 percent respectively.

Millennials also estimated a far-higher salary that would bring them happiness, reflecting their desire for everyday pleasures like craft coffee.

While Gen Z said they would need just $128,000 on average each year to be happy, millennials wanted $525,000 on average. Gen X would like $130,000, while Boomers needed $124,000 on average, the survey found.

Across the board, Americans are experiencing deep financial stress, with 73 percent of all respondents in Empower's survey saying they experience financial stress. With inflation still resting at 3.2 percent, many are unable to afford basic necessities like groceries and housing.

How Do Millennials View Money Differently?

While millennials have often been dubbed a financially reckless generation by their elders, those in the group born between 1981 and 1996 may simply be spending their money in line with the times, prioritizing new technology and experiences despite persistent economic troubles.

Various studies found millennials spend far more on travel and food than other generations, and they're also likely to buy the latest tech upgrade as well.

"For many millennials as well as Gen Z, the world feels tenuous," Litman said. "A sense of security is rare–we're talking about individuals whose lived experience spans the Great Recession, record gun violence, a global pandemic, the climate crisis, 'Code Red for Humanity' to name a few," Litman said.

Millennials also dealt with a record high level of student loan debt compared to their parents and grandparents, and this follows them late into adulthood, often preventing them from putting money toward a home payment or starting families.

In 2023, it was estimated that millennials have an average student loan debt of $33,173, with the amount rising each year with interest rates.

Despite these financial strains, when it comes to millennials and their coffee, it's hard to separate the two.

According to a recent National Coffee Trends Report, younger generations were increasingly fueling the custom coffee movement, with 49 percent of 25-to-39-year-olds surveyed reported drinking at least one cup of specialty coffee in the past day.

The tendency to splurge on these types of small treats could be a larger indicator of a generation trying to steal little moments of joy in an uncertain world, according to Litman.

"They're unsure about the future," Litman said. "And in our race to find some semblance of health and happiness amid instability and seeming less time, we're buying moments of joy to get through the now."

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