Shawn Achor in The Happiness Advantage (2010) points out that spending money on experiences is better than spending money on stuff*. Research shows that the good feelings that come from positive experiences are both more intense and longer lasting than the good feelings that come from acquiring new stuff. Some examples would include:
Experiences: picnic, family vacation, bowling league, camping, dinner party, building a Habitat for Humanity home, and singing in a choral group
Stuff Alone: new chair, new car, new suit of clothes, paying someone to build a patio, new entertainment center, new dining room table, and new wind chimes for the yard
The University of Colorado at Boulder’s Leaf Van Boven (2005) offers three reasons for the superiority of spending on experiences versus spending on things:Research on this kind of “calculated buying” involving experiences is being conducted by psychology professor Elizabeth Dunn of the University of British Columbia. She lamented when interviewed for an article in The New York Times (August 8, 2010) that too much research is done on income levels and happiness, and not enough on the way people spend their income. She summarizes her research by quipping, “It’s better to go on a vacation than buy a new couch is basically the idea.” A recent publication by Daniel T. Gilbert (Harvard University) and Timothy D. Wilson (University of Virginia) had the thoughtful title “If Money Doesn’t Make You Happy Then You Probably Aren’t Spending It Right.”
- Experiences age better than possessions. An early childhood school experience, a memory of a poignant moment with grandparents, a camping adventure, a summer camp caper, a vacation at the Grand Canyon, a family reunion in the mountains—all these memories wear well, embellished here, deleted there, becoming the lore that we love to retell time and again. The sofa just sits there in need of cleaning and repair. Hmmm, there’s a way to make an experience out of a possession in disrepair—involve the family or friends in reupholstering the sofa!
- Experiences stand on their own uniqueness and are thus difficult to compare. Some people engage in social comparison, in which, for example, one compares what one owns to what others have. If others have more than we do, that is a downer, and we want more. If others have less, we are more comforted. Solnick and Hemenway (1998) found that people generally would prefer making $50,000 when other acquaintances are making $25,000, than make twice as much (e.g., $100,000) when their acquaintances are making twice again as much as them ($200,000). Experiences tend to resist such comparison. While one might say dejectedly that “you did more with your vacation time than I did—I squandered it,” it is also possible, and easier to say, and feel good about it, that “you got more reading done on your vacation, and I got more time getting to know my grandkids—both sound good; maybe we’ll swap emphases next time!” In other words, it is easier and more natural to get competitive about material things than about experiences.
- Experiences build more social capital. By their very nature, experiences build relationships (unless you have them alone!). In addition, to talk of one’s experiences is usually less off-putting than to talk of one’s possessions.
Research professors Thomas DeLeire of the University of Wisconsin in Madison and Ariel Kalil of the University of Chicago have analyzed nine categories of consumer spending to determine which categories relate to happiness levels. Their data came from the National Institute of Aging’s U.S. Health and Retirement Study, a 20-year longitudinal project that followed some 20,000 Americans over the age of 50. The final cross-sectional sample comprised 937 individuals, as not everyone in the larger sample completed the supplementary questionnaires. These are the nine spending categories:
- Leisure—trips, vacations (including “staycations”), exercise, spectator events, hobbies, equipment for leisure;
- Durables—appliances, vehicles;
- Charity and Gifts;
- Personal Care and Clothing—plus housekeeping, yard maintenance, laundry;
- Health Care—health insurance, medications, supplies, visits;
- Food In—purchased to prepare and consume at home (including alcohol);
- Food Out—purchased at a restaurant/bar, including takeout;
- Utilities and Housing—plus house furnishings, home repair home insurance;
- Vehicles—vehicle insurance, maintenance, payments.
Only two of the nine showed a significant association with happiness: leisure and vehicles. The researchers point out that both are related to experiences and to social connectedness, while the others are related more to one’s material possessions. In fact, they estimated that spending $20,000 for leisure is associated with the same happiness increase as that associated with getting married.
Gene Cohen, founder of the Center on Aging of the National Institute of Mental Health, concludes that the length of time committed to an experience is a major determinant of the experience’s impact on happiness. And it is not just length, but the way the experience develops over time. For example, to play with one rock band this weekend, another the following weekend, and so on playing for a different rock band every weekend, Cohen would propose that playing with the same rock band every weekend over the same time frame would be more satisfying. So it is duration of the experience plus developing relationships during the experience that elevates mood. Fewer one-night stands, more affairs of the heart, mind, body, or soul.
*This post is substantially based on the section of my book The Owner’s Manual for Happiness that treats the subject of “Spending on Experiences” (Chapter 2, page 56).