It is often said that, when on their deathbed, nobody ever wishes they spent more time at work, but they frequently lament the times they didn’t spend with loved ones.
The same can be said for the things we spend money on – of course you can choose to buy things that make your life more comfortable and enjoyable, but research suggests that money spent on experiences, which build memories, is the most valuable.
Money can make you happier, though after your basic needs are met, it doesn’t make you that much happier. Money is usually a limited resource for most people, although the degree of limitation can seem different!
Logically, to spend money on something that you can keep makes sense, but one of the enemies of happiness is adaptation. We use new experiences to make us happy, long after the pleasure of looking at an object fades.
That is not to say that ‘things’ aren’t useful and enjoyable when you buy them. It is just that you can gain long term enjoyment from reliving happy times, and discussing them with those you experienced them with. It is a point worth pondering when you are planning your finances and special purchases.
There’s a very logical assumption that most people make when spending their money: that because a physical object will last longer, it will make us happier for a longer time than a one-off experience like a concert or vacation. According to recent research, it turns out that assumption is completely wrong.
Dr. Thomas Gilovich, a psychology professor at Cornell University who has been studying the question of money and happiness for over two decades. “We buy things to make us happy, we initially succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.”
Gilovich suggests you’ll get more happiness spending money on experiences like going to art exhibits, doing outdoor activities, learning a new skill, or travelling.
“Our experiences are a bigger part of ourselves than our material goods,” says Gilovich. “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.”
One surprising revelation by the study showed that if people have an experience they say negatively impacted their happiness, once they have the chance to talk about it, their assessment of that experience goes up. He attributes this to the fact that something that might have been stressful or scary in the past can become a funny story to tell at a party or be looked back on as an invaluable character-building experience.
Sharing experiences creates and strengthens bonds between people, which aren’t created if you areas standing in one at a checkout!
It is also human nature to be competitive and feel superior or inferior to others based on material possessions. The same is not true for experiences, as you can be similarly enriched by travelling to Peru, for example, whether you go in 5-star luxury or on a backpacking budget.
Gilovich’s research has implications for individuals who want to maximize their happiness return on their financial investments, for employers who want to have a happier workforce, and policy-makers who want to have a happy citizens.