This post is from staff writer April Dykman.
A few months ago I wrote a two-part post about a study on how money, if spent correctly, can buy happiness. In the report, researchers Elizabeth Dunn, Dan Gilbert, and Timothy Wilson used empirical research to identify eight key ways to spend money that have been proven to increase happiness for the consumer.
Research says when it comes to buying happiness, experiences trump Stuff…
The first principle of spending for happiness, according to the study, is to buy experiences instead of Stuff. Research shows that people are usually happier when they spend their money on, say, a family trip to Florida instead of a new LED television. Why? According to various studies cited in the paper, experiences provide the following benefits over Stuff:
- Experiences keep us focused on the present moment. A large-scale experience-sampling study found that when participants were focused on their current activity, they were at their happiest. When their minds wandered to pleasant, neutral, or unpleasant topics, they were significantly less happy. A time-lag analyses showed that mind-wandering was actually a cause of unhappiness, not merely an effect. Experiences keep us in the present, which makes up happier.
- We adapt more slowly to experiential purchases than to material purchases. One study randomly assigned participants to spend several dollars on either a material or experiential purchase, and then tracked participants’ reported happiness with their purchase for the next two weeks. The study found that participants adapted more slowly to experiential purchases than to material purchases, in part because people adapt most quickly to that which doesn’t change. Stuff doesn’t change, and when it does, it’s usually through wear and tear, which can detract from happiness even more. (Think accidental stain on the new couch.)
- We anticipate and remember the experiential purchases more than Stuff. A Cornell survey found that 83% of participants reported mentally revisiting their experiential purchases more often than their Stuff purchases. Experiences bring us happiness not just when we’re having the experience, but also when we simply think about them. For example, I remember the fantastic trip my husband and I took to Mexico more fondly and more often than the new flooring we installed right before we left. I still like our floors, don’t get me wrong, but they don’t excite me in the same way they did when they were new, I rarely think about them today, and I never think about them when I’m not walking on them.
- Experiences are unique, and therefore difficult to compare. In a 2010 study cited in the paper, researchers Carter and Gilovich found that too much focus on the path not taken is a great source of unhappiness. With experiential purchases, however, it becomes almost impossible to compare. J.D. jumped out of an airplane, I took a three-hour yoga workshop. There’s just no way to compare the two experiences because they’re so different and personal to the person experiencing them.
- Experiences are more likely to be shared with other people. Human beings are highly social compared to almost every other creature on the planet. Recounting an experience with the people that were there brings you closer and makes the experience, at least in your mind, that much better.
I mostly find that the research holds true in my own life. I can’t count the number of times my husband and I have reminisced about trips, cooking classes, and other shared experiences. Oh, we enjoy our Stuff, and I’m the last person who would preach that Stuff is evil, but we never smile or laugh as we talk about the DVD player or the MacBook or the new floors. It serves its purpose and we use it and it adds to our lives, but I’m not excited about it now that the shine has worn off.
…but sometimes Stuff blurs the line
When I wrote part one of the happiness and spending post, many GRS readers pointed out that some Stuff allows them to have an experience, and that’s true. The studies listed above are based on empirical research into spending and happiness, but there are certainly exceptions. Let’s look at what some of your fellow readers had to say.
First, DreamChaser57 commented:
Stuff and Experiences are not always polar opposites on the happiness meter. Someone with a large yard might purchase an expensive riding lawnmower and recapture several hours to spend with family instead of toiling in the yard. A big screen television or basement renovation might encourage more family interaction and teens might be more willing to bring their friends by to entertain instead of being in the streets, a win-win for parents.
Next, Lily said:
It’s often implied that buying stuff is a sin or an offense to true life values, but this is the case only if you buy just for the sake of buying or to keep up with the Joneses.
And Ely said:
If experiences make us happy, and stuff can help make those experiences possible, then the real choice to make is buying stuff that creates experience, rather than stuff for its own sake. If a Lexus will bring you joy every time you get behind the wheel, go for it; if it’s just a way to get around, stick with the Toyota. Don’t buy the big TV if you don’t care about tv; but if it will make your weekly movie night that much better, go for it. It sounds really obvious but I suspect, in the non-PF world, it isn’t.
Many times Stuff makes an experience possible or easier or more pleasurable. It’s a means to an end that I don’t often consider because I’m more focused on the experience. Some examples from my own life:
- Cooking appliances. I don’t need my food processor or my stand mixer, but I use them both frequently. Long ago I’d whip heavy cream by hand, and my arm felt like it was going to fall off. I still appreciate that I can whip cream in the mixer in about two minutes while I’m doing other things.
- A digital SLR camera. You know those people who buy way too much camera for their skill level? Well I’m no Ansel Adams, but I was the opposite. I’ve taken photography classes, studied books and magazines, played with screens and bouncing light and filters and such, and I take pictures almost daily. Up until I bought my digital SLR last month, my primary camera was the one on my phone.
- My yoga mat. I need my Stuff to be in the present moment! I’m kidding of course, but there’s some truth there. I’d slide onto my face without my sticky mat and yoga towel, so the material items allow for a more enjoyable yoga class experience.
- Equestrian boots from J.CREW. Warning: This post is about to get decidedly girly. I instantly fell in love with these boots. They were the most expensive pair of shoes I’d ever bought, but I felt I had to have them (this is college-aged me, before my financial awakening). I didn’t even wait to see if they’d go on sale because WHAT IF THEY RAN OUT? Ten years later people still ask where I bought them. I take them to the shoe doc each season to get conditioned and resoled, and every fall they are the cool-weather item I’m most excited to wear. They are comfortable, cute and they make me want to skip and run. (See? I told you I’m the last person to preach about the evils of Stuff.)
Researchers concede that there’s a fuzzy boundary between experiential and material purchases, and GRS readers had some great examples in the comments. General exceptions include the following:
- Stuff that expands what you can do. For example, I’d reached the limits of my silly camera phone. To take better pictures, I had to upgrade.
- Stuff that engages you in the here and now. When you’re on a mountain bike, on a yoga mat in headstand, or riding a wave on your surfboard, where else could your mind be but in the present moment? Yet in all of those examples, you’re also using Stuff.
- Stuff that helps you learn or see new things. My kayak has taken me to the beach, down rivers and springs, and through canyons in the West Texas desert. I might adapt to the kayak itself, but as long as it’s taking me to new places (or giving me different experiences in the same places, since no trip is really ever the same), I won’t adapt to the experience of kayaking.
- Stuff you use frequently. Material items really qualify as Stuff when they’re unused, just taking up space. If you use something frequently, you’re probably deriving a great benefit from it, even if it just saves you time and allows you to do other things (like the example of the riding lawnmower).
It’s also true that experiences aren’t one-size-fits all. A few readers gave examples of awful trips that they felt were a waste of time and money. And sometimes we buy Stuff thinking it will lead to experiences, but it goes unused and becomes clutter. In the end, if you buy something that isn’t true to your interests and lifestyle, it won’t make you happy, whether you purchase something experiential or material. It comes down to doing what works for you.
GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, GE Capital Bank, and more.