Why you should spend your money on experiences, not things

Can one buy happiness? If yes, what should the money be spent on? According to a psychological study experiences make people happier than material possessions.

Can one buy happiness? If yes, what should the money be spent on? According to a psychological study (Gilovich & Van Boven 2003) experiences make people happier than material possessions. Read further to find out why an exotic vacation might bring you more happiness than a brand new Audi.

“The good life” may be better lived by doing things than by having things. There are at least three possibilities, each which may be a possibilities to explain this phenomenon. (Gilovich & Van Boven 2003.)

  • People adapt to material advances sooner than experiences. This means one requires continued increases to achieve the same level of satisfaction. In addition, you’re much less prone to negatively compare your own experiences to someone else’s than you would with material purchases.
  • Experiences are more central to one’s identity. A person’s life is quite literally the sum of his or her experiences. Rich experiences create a richer life, however, the same doesn’t apply to material possessions as they remain “out there”, separate from the self. Furthermore, experiences satisfy intrinsic goals relating to personal growth.
  • Experiences have greater “social value”. Experiences are more pleasurable to talk about and they more effectively foster successful social relationships, which are closely associated with happiness. What is more, experiences may be inherently more social than material possessions (consider dining, dancing, and dating vs. shirts, sweaters, and silverware).

No matter how gratifying your purchases might feel to you at first, based on this study, there’s no long-term effect on happiness. There are some limitations to the study, however. For example, some purchases enable satisfying experiences. You first need a piano to be able to play it. Even a dishwasher might be something that adds value to your life in a major way. In addition, it should be noted that the concept of happiness is very subjective. Thus, for some people material possessions might actually be more gratifying than any experiences.

How do you feel about this study? Have experiences made you happier than your purchases?

Source: Gilovich, T. & Van Boven, L. 2003. To do or to have? That is the question. Journal of Personality and Social Psychology 85, 1193–1202.