09 Feb Happier People Spend Money on Experiences, Not Things
Editor’s Note: We’d like to thank our guest blogger, Vincent Stokes, for writing this great piece about the psychology of travel. Keep this in mind before you indulge in that tax refund retail binge.
For a lot of people, happiness can be elusive. How do we attain it? How do we maintain it? We always hear that money can’t buy happiness, and when you consider materialism and buying “the next big thing,” that is probably true. But money can also buy us experiences, and in the past decade, a number of psychological research studies have shown that these experiences bring people more happiness than new possessions do. Cornell psychology professor Thomas Gilovich, and Harvard-trained psychologist Mathew Killingsworth, along with Cornell doctorate candidate Amit Kumar, studied anticipation as a driver for happiness and found that people see the benefit of their experiential purchase both before and after they buy it.
Gilovich, Killingsworth, and Kumar made the comparison between waiting for an experience (concert, vacation, dinner) and waiting for a material good (online purchase). In anticipation of their upcoming experience, people experience a “pleasantness,” but in anticipation of their new purchase to arrive, people are more likely to experience frustration or impatience. Kumar says, “You can think about waiting for a delicious meal at a nice restaurant or looking forward to a vacation and how different that feels from waiting for, say, your pre-ordered iPhone to arrive.”
Some of Gilovich’s earlier studies show that another reason that experiences are a better purchase for attaining happiness is that people are less likely to compare their experience to someone else’s. But if they buy things like clothes or cars, comparison is probable. In 2010, Gilovich co-authored a paper with psychology professor Daniel Gilbert, in which they note that people can’t always decide if they’d prefer a higher salary that is lower than their peer’s or a lower salary that’s higher than their peer’s. In contrast, people would rather have four weeks of vacation when their peer has eight, than have two weeks of vacation when their peer gets one.
In general, experiences allow people to grow and expand. If you travel or pick up a new hobby then you interact socially, learn about yourself, and make memories, which often get better with time. Bad experiences can even become good stories and give us happiness years later. That kind of rationale is much harder with physical purchases. If you buy something and it breaks, malfunctions, or simply doesn’t live up to your expectations, you return it or simply regret it. Even sharing your experiences with someone who wasn’t there makes people happy. Telling stories and sharing pictures with other people is a positive interaction, describing your new shirt is less so.
But what is it about imagining your experience before it happens that makes it so much more satisfying than imagining your new purchase? Kumar says that it’s because we consider all the different outcomes of our future experiences. We daydream about everything that could or might happen. “That’s what’s fun,” she says. With a physical purchase, you generally know what you’re going to get.
“Stuff” vs Experiences
Further research from Cornell shows that Millennials tend to make purchases based off of societal pressure or influence, such as watches, jewelry, and clothing. This all suits the need for instant gratification; for a while, these things might make them happy, until they adapt and become excited by the next trendy item. Their new watch falls to the wayside, and they continue to shop in an endless cycle. “You can even think that part of your identity is connected to those things,” says Gilovich, “but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum of our experiences.”
These psychological studies encourage people to ask themselves, why should I buy the latest tech when I could save up for a plane ticket and a Japan Tour, or an African Safari, or South American expedition? People who plan to have experiences tend to be happier. They anticipate the trip, imagine what it will be like, actually go out and experience it, and then bring home the memories that will last forever.
It’s good to remember that some experiences don’t cost anything at all. Hike a trail, walk your dog, spend the day outside for free. But even the pricier experiences like travel can make us significantly happier. The planning and the anticipation, followed by the pleasant afterglow leaves us feeling better connected, more in touch with ourselves, and less eager to money on “stuff”.