4 Reasons You Should Splurge on Experiences, Not Things

By Claire Millard on 21 April 2016 2 comments

The 1980s might feel like ancient history, but whether or not you lived through the days of big hair, denim, and constantly winding your cassette tapes back with a ballpoint pen, the 1980s staple of excess was pretty much universal. And has been ever since. Accumulating stuff has never been hotter. Think Wall Street, and Gordon Gekko's motto, "Greed is good."

Excessive consumption seemed cool in the '80s, but so did mullet haircuts and shoulder pads. Like the mullet, this relentless consumerism should be consigned to history. Because we have evolved, and we now have a better understanding of what makes us happy, and why. (See also: 5 Ways to Stop Your Mindless Spending)

Don't chase stuff, chase experience. It'll make you happier. Here are four reasons why.

Money Doesn't Make You Happy

Song writers have long known that money can't buy you love, and also, that the best things in life are free. And while it's true that there are some ways in which money can positively influence our outlook and prospects, this only works up to a certain point.

The Easterlin Paradox is the classic research into the topic, named after a 1974 book chapter, penned by economist Richard Easterlin. Although the 40 years since then has provided plenty of time for other research to debate the merits of this theory, Easterlin surmised that money makes you happy only to a certain extent. Once basic needs are met, the impact of money on happiness diminishes, and ultimately, an excess of cash can cause stress, too.

Views on this idea will vary based on personal experience, and some subsequent research has heartily agreed with the original premise, while other researchers have set out to disprove the hypothesis. A 2010 research paper found that $75k is the magic number, after which, income does not directly correlate with happiness. Although we are schooled to equate material things with reaching success, these same items do not lead to emotional wellbeing. All the more reason to use any spare cash to buy experiences, not things.

Stuff Loses Its Appeal — Memories Do Not

In a 2014 journal article, wonderfully named, "We'll always have Paris," psychologists Thomas Gilovich and Amit Kumar explore the longer term impact on happiness from experiences compared to material purchases. Their research found firmly in favor of spending money on experience rather than things.

The scientific key to their research is "hedonic adaptation," meaning that we get used to things we have, and therefore the pleasure we associate with them fades away. If you buy a new tech gadget, for example, you might experience some initial high, but this can be eaten away as the product degrades, as your friends parade their newer versions, and as warranties or repairs add onto the initial cost. After a relatively short time, you're used to having your new toy. The novelty has worn off, and you no longer derive pleasure from it. Hedonic adaptation has set in.

On the other hand, that skydive, dream vacation, or meal out with friends lives forever in your memory — often getting better over time, rather than worse, aided by our natural inclination to remember things fondly with rose-tinted flashbacks.

Experience Is Social

A strong argument in favor of spending money on experiences rather than things is not about the experiences at all. It's about the people we share them with.

Experiences are often naturally social events, and they strengthen the bonds with others who make us happy. Also, experiences are better shared than the act of buying stuff. The tales that you share over the dinner table with friends in years to come are much more likely to be about the time Uncle John got sunburnt on vacation, rather than the awesome SUV you drove there in.

Material Success Can Be Transient

Even the very oldest of Millennials joined the workforce only a few years before the Great Recession rocked the world, and for those graduating after, life has been even tougher. It's hardly surprising that Millennials are driving the sharing/gig economy more than any other generation. Research shows that they will value access to, not ownership of material things, shifting the emphasis away from actual consumption.

Growing environmental awareness has its part to play in this shift, but having experienced the struggle of recession firsthand, Millennials are also conscious of the fact that material goods are transient and could be taken from you in an instant. Memories, on the other hand, can not be taken away — making spending on experiences, rather than things, the natural choice for this generation.

What do you think? Tell us in the comments.

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Guest's picture
Kat L

I agree with this concept totally, with one notable exception that these articles never seem to mention. I have a very poor memory, I forget things within a year or two after they happen. So for me (and people with that issue) it's helpful to BUY one item (even a small one) that reminds you of the event (so I remember to remember and say 'Oh yeah! I did that!'

Guest's picture
Christie

Exactly why I'm working! I work cleaning houses so that we can go on amazing family vacations. We saved for 3 years to take an almost 3 week trip to London/Paris/Disneyland Paris last fall. Worth every penny for the experiences we had that we could never get any other way. Next up? A trip to Puerto Rico and bioluminescent kayaking and a Disney cruise home! And then a trip to see California and things my family has always wanted to see out there. "Dreams won't work unless you do!"

Guest's picture
Sam

I have to say that personally despite remembering certain positive experiences rather than things with close ones at the time they can also backfire in a way as some of them are tied to trauma of suffering an unclear, unexpected friendship later.

Dining out with friends above is listed? Now, isn't it a different matter or hamper on happiness if one spends a good bit of money treating a friend to dinner, but unfortunately loses that friend later through unclear breakup or even death? Also, wouldn't it drag down happiness if one has a memory of best hike or trip ever with a close friend, lover or family member, but after sometime that person separated, broke up or betrayed at worst?

Personally, my lifetime trips abroad to places in native India, Nepal, 6 countries in Europe, Canada, local hikes and silent Vipassana meditation retreats along with experiences at a yoga center have brought such joy with fullest positive memories.

What do you all say to what I have mentioned? Thanks!