Do Experiences Lead to Greater Happiness Than Material Purchases?

The August issue of the Journal of Consumer Research arrived in my mailbox yesterday. It contains an interesting article from Nicolao, Irwin, and Goodman entitled “Happiness for Sale: Do Experiential Purchases Make Consumers Happier than Material Purchases?” This is a topic we've skirted at Get Rich Slowly, but never fully explored. Many readers have offered anecdotal evidence that they get more “bang for their buck” by spending money on experiences instead of Stuff.

This new research supports that idea — but only for experiences that turn out well. Good experiences do bring greater happiness to consumers than buying Stuff. But bad experiences make us more unhappy than bad purchases. From the article:

Our results replicate those of Van Boven and Gilovich (2003), showing that, for positive purchases, experiences lead to greater happiness than material purchases. Also, there is a sense in which our results support the experience recommendation because we show that on average the most happiness obtained through purchasing is likely to be obtained through experiential purchases that turn out well.

However, the experience recommendation in its pure form is incomplete. Our findings suggest that a lifetime of negative experiential purchases might lead to quite an unhappy life and furthermore that negative material purchases may not leave as much of a negative mark.

In essence — and these are my words, not those of the authors — it seems that when we pay for experience, our happiness or unhappiness is magnified. Generally, however, we have more positive experiences than negative experiences, which leads many of us to conclude that spending on experiences brings more happiness than spending on Stuff.

In the general discussion, the authors review past studies to explore reasons that buying experiences might provide greater happiness. Here are a few examples:

    • Positive social interaction is a major source of happiness. Experiential purchases often involve positive social interaction.

 

    • Some experiential purchases involve pursuing goals and obtaining a “flow” state, which has been shown to be correlated to happiness. (The authors note that even online games can produce flow. World of Warcraft can make you happy!)

 

  • Finally, exercise increases happiness. Experiential purchases can often lead to exercise.

“Thus, positive experiences may be correlated with the basics of human happiness,” write the authors. When we buy experiences, we often inadvertently purchase things that contribute to happiness.

A new $1000 flat-screen television won't give you social interaction, won't help you achieve your goals, won't give you exercise. By paying $1000 for a week-long bicycle tour of Oregon will do all three. The latter is more likely to make you happy.

A couple of other points from the article:

    • Materialistic people tend to receive equal happiness from positive purchases, whether they're experiences or material goods.

 

  • Our feelings about a material purchase fade more quickly than they do for an experiential purchase. For example, I still feel happy about the vacation Kris and I took to Victoria, B.C., in 1998, but I'm no longer ecstatic about finding a rare Tintin book on that trip, though it pleased me greatly at the time.

As I gradually reduce the Stuff in my life, I've been thinking about what I can do to improve my happiness in the future, to not become so absorbed with material possessions. Kris and I have already decided that we'd like to focus on travel. I'd also like to take some classes (photography, French). Essentially, I've decided on a sub-conscious level that I'd rather pay for good experiences than Stuff.

Photo by Charlie Brewer.

More about...Psychology

Become A Money Boss And Join 15,000 Others

Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)

Yes! Sign up and get your free gift
Become A Money Boss And Join 15,000 Others
guest
59 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
EscapeVelocity
EscapeVelocity
11 years ago

If you think about it, most material purchases involve some hope of an experience.

Baker @ ManVsDebt
Baker @ ManVsDebt
11 years ago

YES, duh!

Oh wait, you didn’t want a literal answer to the question?

But seriously, this has been a central part of my family’s young journey. We try to constantly sacrifice material goods & possessions (although it’s extremely stressful at times), because it multiplies the freedom we have to EXPERIENCE more (and makes the experiences themselves more vibrant).

Thanks for shooting over the interesting post. I loved it!

RB @ Richby30Retireby40
RB @ Richby30Retireby40
11 years ago

The answer is ABSOLUTELY YES! Experiences lead to much greater happiness than material things. I remember when I was living off of $100USD a month living abroad during college. I slept on a wooden plank, and it was 90 degrees in the summer day and 80 degress at night. We had a fan that moved across the room every 15 seconds. I was broke as beans and yet, that summer abroad was one of my happiest memories ever. We shy away from spending bucks on experiences b/c we feel they are temporary… yet the memories stick with us forever. Hence,… Read more »

Steve
Steve
11 years ago

I tend to purchase hobby supplies and related books(electronics, programming and astronomical related mostly at the moment) which equate to long term experiences for me. I’ve learned more about the world I live in, hung out with the local astronomy club, etc, and for me that’s a much better value then a 3 day bike trip. I’d rather buy a new bike and find some local people to ride with! With the Internet and sites like meetup.com, it’s easy to find or start a group to turn your things into group experiences. In that way, I think the experience vs… Read more »

Crystal
Crystal
11 years ago

Please tell this to my in-laws. They spent all of last month visiting us from out of state and didn’t. do. one. thing. We kept trying to make plans, to create some new exciting experiences for all of us to take part in together, but they kept citing money issues and “we can’t afford to go to the amusement park/swimming/hiking/camping/dinner” etc. And by the way, some of these things didn’t cost more than $3. BUT they took daily, multiple hour long shopping trips to Walmart, Costco, outlet malls, and told us of their overnight victories on ebay. They had to… Read more »

Nate
Nate
11 years ago

I really enjoy when you can combine experience with material purchase (the ultimate “happiness” bang for the buck). Example: my purchase of a 2004 cobra SVT mustang. A material purchase? Yes. An outstanding experience every time I drive it? Yes again!!!

I’m sure JD feels the same way about his Mini 🙂

Rob Bennett
Rob Bennett
11 years ago

Experiences generally add more than material possessions. But I don’t buy into any suggestion here that you need to pay money to have experiences. You can research a question you have always wondered about at the library for free. You can go on a long bike ride with your spouse for free. You can go back and listen again to records you cared about when you were young for free. You can visit old people for free. You can write a budget (better called a “Life Plan”) for free. You can play cards with friends for free. You can learn… Read more »

chacha1
chacha1
11 years ago

Hi J.D., this is a topic I love. There’s an element missing in the calculation, though, and that’s an individual’s propensity to fear new experiences. There are many who say they want to travel, for example, but who are actually afraid of being out of their comfort zone; sometimes to such a degree that they are predisposed to view the travel experience negatively and to remember it as a bad experience, even if they enjoy specific moments, sights or activities that were unique to the travel destination. They complain about every minor inconvenience, delay, or misunderstanding and focus on those… Read more »

J.D.
J.D.
11 years ago

Nate wrote: I’m sure JD feels the same way about his Mini.

Yes. Yes, indeed. 🙂

I think that’s a great point, actually, Nate. When you buy something that you’ll use, something that helps give you experiences, you have both a material thing and the experiences themselves. I’ll bet this can lead to all sorts of enhanced emotions.

And Rob (#7) has a great point: You don’t necessarily have to pay for experiences…

Lord
Lord
11 years ago

Yes, but just think about all those painfully expensive purchases one has to make just to survive. Things like medical care, a new roof, new furnace and air conditioner, things one purchases out of need rather than desire and still regret having to pay for but have little choice about.

Tyler@Frugally Green
11 years ago

A co-worker of mine and his wife have an awesome policy: Every time they GO anywhere they make it point to do something that they know they will remember positively for the rest of their lives. Any time they BUY something, the rule is to do something with it that accomplishes the same thing.

Leah
Leah
11 years ago

I love #2, especially the part that goes “multiplies the freedom we have to EXPERIENCE more.” Some of my best times in life have been when I’m moving; all my stuff is packed in boxes, so I get out to experience life more. I’m still working on shedding my stuff (rather than just leaving it packed), but I generally am more happy having experiences. I went to New Zealand a few years ago. I spent $3000, including airfare, on my 3 week vacation. I slept in hostels, made my own food, and didn’t buy a single souvenir. I DID buy… Read more »

ZFarls
ZFarls
11 years ago

Absolutely, anytime those experiences involve friends than it sticks in your mind greatly. I can’t think of more than a handful of items that bring me greater joy than thinking back about studying abroad in Australia.

We played golf on a guys weekend and although we paid for dinner (extra 10 bucks) I will always remember golf and the fun but never the 10 extra dollars. Budgets can’t stay too tight for that long, if your getting out of debt thats cool but any longer than a year or 2 and you start to miss out on life.

rfeight
rfeight
11 years ago

J.D. What a great post! It is funny how often the demographic of people that are successful with their finances also check the box “travel” as their favorite things to do. Keepsakes purchased during travel more often remind the traveler of the trip, not the keepsake.

I wonder what people would prefer more – to retire, or to “be” retired having have the retirement experience? Does our number mean anything other than we get to experience retirement? Might be another article?

mhb
mhb
11 years ago

Your mention of the book you found on a trip you still like to recall reminds me: One of the best “purchases” I’ve made was to plan a trip for DH and I to take a real vacation last year – our first ever. We had a blast. (And we paid for it all in cash!) But the second-best purchase was the mandolin we bought while on vacation: we spent a full day meandering through music shops (and getting happily sidetracked in other neat spots in the city) until we found it, and now it’s a fun instrument we can… Read more »

Tyler Karaszewski
Tyler Karaszewski
11 years ago

The only reason *to* buy stuff (in my opinion) is because it’s going to improve your experiences. If you take the flat-screen television as an example, what’s the experience improvement you’re buying for your $1000? You get the same old thing you had before, only slightly bigger and sharper. It’s not something fantastically new, and the stories it shows you are the same as your old TV. If you spend your $1000 on a trip to Hawai’i (or wherever) you get to see things you never would have seen at all otherwise. The impact the trip has on your life… Read more »

Jim
Jim
11 years ago

I’d be curious to see how someone can objectively compare this kind of thing to analyze it. Do you do a dollar per dollar comparison between buying “stuff” versus buying experiences? Are they trying to say that every $1 spent on experiences will get me more happyiness on average than a $1 spent on buying a physical item? How do you compare $30 for a night out at the movies, buying a video game for $45, $1500 on a weekend trip to Vegas and $5 for used book? Is the experience of going out to eat and spending $60 worth… Read more »

Karen
Karen
11 years ago

Just because you spend a lot on an experience, that won’t automatically make it unforgettable!

And many times the experiences are better *because* you have spent little on them—bumming your way around Europe or hitchiking across the US–you literally can’t buy those experiences!

My own preference is for experiences that cost little anyway. I would always enjoy hiking in the woods more than attending an expensive rock concert. I would always enjoy throwing a dinner party for my friends at home more than dropping major bucks by taking everyone out to a fancy restaurant.

Kevin@OutOfYourRut
11 years ago

I think positive experiences tend to become more important with age. Many good experiences = a life well lived, and the memories grow and flourish like a well watered garden. Perhaps this is because we can relive and retell them, and maybe also look forward to repeating them. Things on the other hand, tend to have a short shelf life. A new car for example, is most satisfying in the first few months of ownerhip, and quickly declines as a “high” with time. Also, when you come to the end of life, it’s far more likely that you’ll remember what… Read more »

Jla01
Jla01
11 years ago

“A new $1000 flat-screen television won’t give you social interaction, won’t help you achieve your goals, won’t give you exercise.” That’s not true in my case at all. TV + Xbox Live = social interaction and fun with family in friends thousands of miles away. You really can’t do that with many other mediums. re: goals TV + Gnomon Computer art DVD’s or classes online from the internet. Also there are cooking shows, etc that can hone my skills. re: exercise. I have my treadmill in front of my tv and watch shows while I run. So, pretty much, IMO,… Read more »

Kraygk
Kraygk
11 years ago

I have traveled extensively to rather exotic and far flung countries and locals. While I usually enjoy traveling and try to go often, I have found that more than the location, and how “beautiful” or “awe-inspiring” it is, is how my companions were. I have been on terrible trips that include being without a place to stay , having to sleep in cars, being without money but have had a memorable and great time because I was with someone who I really meshed well with. On the other hand I have been to amazing places, like Angkor with people who… Read more »

Gee
Gee
11 years ago

An experience purchase can be just as useless as that gadet you thought you needed, but never really used. Tickets to a school dance. Tickets to a musical everyone was raving about. That white water rafting adventure. All things I spent money on at one time or another that I didn’t enjoy.

I bought all these things because someone else was going and convinced me I would enjoy it. No different than all the people who are trying to convince me I need to get a TIVO.

Charley
Charley
11 years ago

Saw a video yesterday that was circulating about Deepak Chopra being interviewed on Ellen DeGeneres (sp). I think the interview was probably from January because she asked him what he wanted to concentrate on this coming year. He replied, quite simply, to covet relationships, not material possessions. This jolted me at the core. I think this falls in line, exactly with the experiential spending. Wouldn’t it be so much more fun to book a wine tour in Italy (assuming you like wine) with friends or family than to by a big screen TV? Sure the big screen lasts longer than… Read more »

Michael
Michael
11 years ago

well stuff like books and CDs do provide some sort of sensory experience–both inspire, both expand your imagination, both stoke your mood and make you happy again and again when you re-use them.

Shara
Shara
11 years ago

None of those reasons of why experiences make us “Happier” than stuff really rang true to me. I think the reason an experience (good or bad) affects us more is because it is a memory. Stuff becomes background and doesn’t make an impact in our personalities, at least not a big one. Versus an experience is an experience BECAUSE it is out of the ordinary. Therefore it is a memory and becomes part of your history and will be mulled over in your mind in the future in a way that new TV doesn’t. They can also signal decision points… Read more »

Pinbot
Pinbot
11 years ago

“…I’ve decided on a sub-conscious level”

That’s actually impossible. Possibly, you have just discovered that on some sub-conscious level you have developed a preference for buying experiences rather than material things. My guess is, you are actually justifying your goal of reducing the ‘stuff’ in your life by adopting a love of purchased experiences. Good for you!

I’m a pack rat and I can’t break the pattern. It’s going to be one heck of a mess cleaning up after me when I’m gone.

E
E
11 years ago

I think the key word is “experience” though in some ways experiences are attached to stuff. If you watch a lot of tv or if you like to host movie nights at home (an inexpensive way to spend time with friends) then $1000 for a kickass tv could prove worthwhile. Same can be said for books, music, or artwork; if you use and value it, it can make you pretty darn happy. As for spending on a trip instead, that value depends entirely on the experience. Going someplace fabulous with my entire family, for example, would be a lousy use… Read more »

Frugal Bachelor
Frugal Bachelor
11 years ago

Spend money wherever it makes you happy, and don’t get hung up trying to overanalyze whether a purchase is a ‘thing’ or an ‘experience’. In the end, matter and energy are all the same thing anyways. I personally doubt the solution to a lifetime of material indulgence is to start diverting all of you money to experiences. Think comic books are expensive? Start taking first class flights to Europe and staying in four-star hotels. You can easily spend more for one night out on an international town than you can for a big screen TV, experiences are something where it… Read more »

Terry
Terry
11 years ago

Yes , it’s called making memories. If you bring your kids the the ocean and the see dolphins swim by, years later they will remember that. The toys you bought? Not so much.

JRB
JRB
11 years ago

“Do Experiences Lead to Greater Happiness Than Material Purchases?”

YES. They do. It only took me 40+ years and a house full of stuff I no longer am interested in to figure that one out.

Trevor Hammond
Trevor Hammond
11 years ago

So funny…great timing JD. I JUST wrote a blog on my feelings about this topic, titled “Possessions vs. Experiences”. I literally was enjoying watching my 2-year old enjoying her swim lessons, and the sheer delight…and it resulted in me rushing home to write this:

http://fi-movement.typepad.com/the_financial_independenc/2009/07/possessions-vs-experiences.html

HW
HW
11 years ago

Obviously, as even your post suggests, this varies by person…some people may get more happiness from material purchases, but apparently most people do not. Fair enough; I can buy that. In my case, I have to consider the fact that experiences are great for the moment; but since I have a very weak, nearly non-existant, long-term memory, the happiness an experience might give me at the moment will be lost before too long…while some material purchases give me happiness for years and years. For me, though, it’s about making wise choices and making sure that I am selective about my… Read more »

Becky
Becky
11 years ago

This is a tough, and sometimes, touchy subject. I remember talking with a lady here in Poland who had no running water or toilet inside her apartment. (If she wanted it, she had to put in the plumbing herself–the gov’t doesn’t pay for it even though it is gov’t housing). She was saving for a vacation. I remember thinking that if I had been in her situation, with kids, I’d prefer to forgo the vacation and get the indoor running water. Why? Because once you have the water, then life is easier “every day” and your vacation will be over… Read more »

Brenda
Brenda
11 years ago

I’ve felt this way for a long time. I’d much rather shell out money for an experience than a thing in order to obtain a bit of happiness. The ‘thing’ will just get old and forgotten, but the experience will be shared with friends, and will be fondly remembered for the rest of my life. And experiences can sometimes be free or low-cost.

When it comes down to paying for happiness, I’d rather pay for good memories of wonderful experiences.

Kenney
Kenney
11 years ago

I think so. I recently bought a new flat screen TV, and I’m incredibly happy with it. It’s one of the better “material” purchases that I’ve made in the last few years, along with my magic bullet smoothie maker.

However, I’ve also gone to Toronto and the ocean with my friends this year, and I think those things will stick with me much longer than the TV.

Being a little materialistic isn’t bad, but ultimately it’s the things you do that matter most.

plonkee
plonkee
11 years ago

@Becky: For you, that was important – you made a trade that worked out best for you. For other people, the trade might go the other way, and that’s perfectly ok. I have lots of things that need doing to my house. I chose instead to save up for a decent oboe, because that is makes me happier. (The house is next.)

getagrip
getagrip
11 years ago

I think the one thing most folks forget is that with a material possesion, either you end up using it daily, in which case it’s no longer a novelty, or you park it somewhere and it sits, in which case its no longer of real use particulary when your memory of it conflicts with the reality when you see it again. Experiences are typically the same way. If you ride a roller coaster a dozen times, the novelty is gone, and the experience suffers. If you go as an adult to the same place you vacationed as a kid, chances… Read more »

Kevin@OutOfYourRut
11 years ago

Based on the comments it seems like there’s a strong concensus in favor of experiences over things.

I think this is as it should be because life is what we do with it (experiences) and not what we have (things).

Russ
Russ
11 years ago

I think it’s very much subjective. I tend to side with the minority of dissenters – I’ve been skiing all over Europe, been to Barbados, Vegas, Amsterdam, Paris, Milan, Madrid, Barcelona, Menorca, Dublin, and so on. I don’t travel much any more, because I don’t feel that I got value from those vacations. And, genuinely, I don’t remember much about them at all. Barbados in particular – we visited some caves, took a submarine ride around a shipwreck, and attended a cultural cabaret evening; two years later I was chatting with a friend who was also there and I found… Read more »

Justin
Justin
11 years ago

It’s hard to say. I do believe though that if you have more material possessions, you don’t enjoy the experiences near as much.

Shara
Shara
11 years ago

Frugal Bachelor Says: “In the end, matter and energy are all the same thing anyways.”

hehehe. E=mc^2. Right on.

However I don’t think that was QUITE the point :P.

MK
MK
11 years ago

You know, I read an article about this exact same subject on MSN Money a few months back, and they pretty much agreed with what they say in the Journal of Consumer Research. (wish i could find a link to the msn article) But it does make sense. If you have a good experience, you don’t feel like the money spent was a waste. When things go horribly wrong you begin to second guess why you spent that money and decide it wasn’t worth it at all. As someone who just went Skydiving yesterday (woot woot!) I’d have to agree… Read more »

Tracy
Tracy
11 years ago

I’m a bit torn. My experiences are ones that I wouldn’t trade for the world. I’m still paying off my 2006 trip to Europe even though I was back packing and staying with people the whole time. It made me so happy that I don’t mind the expense. There are lots of things you can do for free that make for just as nice experiences. A lazy day in the park with my boyfriend and a picnic is as memorable to me as the first time I went to Disney World. It all depends on perspective. On the other hand… Read more »

Foxie@CarsxGirl
11 years ago

JD, Nate: If we’re saying that paying for cars gives us both material and experiential happiness, it is of course a HUGE YES! Not only does owning my cars make me happy (And owning them with almost no loans. Two out of three aren’t financed, and those are the two more expensive…) but they give me a TON of chances to be social with other car guys and such. Material goods aren’t bad, but having this combination makes my life great. My house stays relatively clutter free, and spending money on our cars doesn’t take up any extra space and… Read more »

ebyt
ebyt
11 years ago

I guess it’s pretty obvious, but a mix of the two (experience + material) makes me happy. Spending mindlessly does not make me happy, but the Coach bags I own do. Sure, the money I spent on the few bags I own could have paid for a big chunk of a vacation, but I carry a bag daily and it makes me happy. Would I buy even more bags and never go on vacation or out for dinner? No. I am quite a materialistic person but I certainly see the value in experiences over “stuff” – you just have to… Read more »

Linear Girl
Linear Girl
11 years ago

This post made me think about where I’ve spent the most money the past few months. After the house payment, the three biggest were food, skiing, and a trip to my parents’ lake house several states away. I buy the most Stuff in order to cook and consume meals, but I wouldn’t be able to enjoy the experience if I hadn’t bought the ingredients. I love to ski and couldn’t go as often if I didn’t own the equipment. The current spending for the lake vacation was pure experience, but the trip would have been less fun if I didn’t… Read more »

David
David
11 years ago

If you’re interested in a new approach to boost your happiness based on the latest positive psychology research, check out our iPhone app: Live Happy (there’s also a Free Trial version); it’s based on the work of Dr. Sonja Lyubomirsky, author of “The How of Happiness” and provides a unique method to create a personalized program to increase your happiness.

You can also learn more about the iPhone app on our Facebook page.

Kevin@OutOfYourRut
11 years ago

We might be able to gain some insight by asking ourselves two questions:

1) How many pleasant experiences do you remember from your childhood?

2) How many really fun toys do you remember having during childhood?

Might help to determine if you’re a things person, or an experiences person, if in fact either is a personality type at all.

Van
Van
11 years ago

Saving up for a trip to Japan. Also saving for a Canon 5D II camera. Both may cost around $3K. I won’t have as much fun experiencing Japan with the Canon 5D II. Loophole! Expensive Loophole!

MyFinancialIndependenceCoach.com
MyFinancialIndependenceCoach.com
11 years ago

Such great interpretations of this “thought” from everyone! In my personal coaching, often it comes down to what gives you the most fulfillment in your life…and as we can see, every single person is different. It’s not black and white by any stretch. For some, a nice car gives such a sense of accomplishment, and enjoyment. The point I make to my clients is that in MOST cases, people end up tied to the costs of their possessions that do NOT drive happiness and ultimately, fulfillment. They drive the BMW and Lexus to primarily “keep up with the Joneses”. The… Read more »

shares