Experiences Trump Possessions

Here's an interesting piece from CNN that says experiences trump possessions. A recent study in San Francisco just determined that, in the long run, experiences make people happier than possessions. In other words, you'll be happier (on average) taking your family to Disney World than you will be buying that $3,000 work of art. The details:

The initial joy of acquiring a new object, such as a new car, fades over time as people become accustomed to seeing it every day, experts said. Experiences, on the other hand, continue to provide happiness through memories long after the event occurred.

The most striking difference was in how participants said others around them reacted to either the purchased object or experience. Experiences led to more happiness in others than purchases did. A sense of relatedness to others -- getting closer to friends and family -- may be one of the reasons why experiences generate more happiness.

"When people spend money on life experiences, whether they also take someone with them or buy an extra ticket or whatever, most of our life experiences involve other individuals," Howell said. People were fulfilling their need for social bonding while having these experiences, he said.

Another reason for increased happiness in experiences, the researchers found, was that people felt a greater sense of vitality or "being alive" during the experience and in reflection, Howell said.  "As nice as your new computer is, it's not going to make you feel alive," he said.

Most psychologists who study the phenomenon say people adapt to a new purchase in six to eight weeks, up to a maximum of three months, Howell said. That means the initial pleasure we get from a new possession generally fades in a matter of months.

Wow, this is very, very interesting to me. Why? Because much of our society is focused on getting more "stuff" -- a new car, a new boat, a bigger house, etc. In fact, we often see these as "assets", good financial decisions that will have at least some monetary value in the future. On the other hand, we don't value money spent on experiences (like a vacation) as much since it's "gone" and has no residual value. But in fact, what brings happiness (at least according to this study) is exactly the opposite. Quite interesting indeed.

Of course you can use assets to create experiences. For instance, you can buy a boat and take your family out on it every summer to create good memories, so the issue isn't black and white. In addition, this is one study, so there's still a lot to be found out about the relationship between assets, experience, and happiness. That said, it's intriguing to me that this study found what it did.

I know that we've relived several experiences over and over again as a family. We talk about our trip to Disney, times visiting relatives, outings we've had here and there -- all these are seen as the "best" parts of our family life. I can't recall a conversation we've had that focused on something we bought and how great of a purchase it was for our family. It just never seems to come up.

And one final point: experiences don't have to be expensive. Sure, we talk about our Disney trip with fondness, but we also talk about memorable soccer games, school plays, and times with family and friends that are special to us. None of these latter experiences cost us much at all. And yet they are among our most valued memories. Very interesting indeed...

Comments

[Moneymonk]

I do agree, if nice to look back at many experiences I had (and still having with my family.

[Keith]

This article is right on target. New "things" are nice but the excitment certainly fades quickly. The things that end up meaning the most to us are the intangibles. I'd venture a guess that not many people lay on their death bed lamenting about how much they'll miss their boat or whatever. :-)

I like what you said about good experoences need not be expensive. Some of the best times I've had with my three daughters didn't cost much money at all.

Thanks!

[ros]

This transcends to doing activities like volunteering too. I am loving volunteering, and I had not been able to volunteer when I was slaving away at work. With me reduced to part-time (not by choice) I volunteered more, and I have had many interesting experiences from it. (It also takes my mind off of negativity like the recession and such).

[LotharBot]

Assets can allow you to have experiences. They can be expensive, like a boat or lakeside cabin, but they don't have to be. A board game or a set of books can generate plenty of memories. So can a zoo or museum membership, or volunteering, or participating in sports or even video games.

It's also worth noting, creating a comfortable space is one way to encourage people to spend time there and have fond memories. Comfortable furniture and simple, pleasant artwork have made my living room a favorite place for family and friends to hang out and create memories. Having enough space for your kids to bring friends over -- in other words, buying a house that's big enough (but not too big) -- can be a great investment.

The pleasure you get directly from a new possession fades over time... but the pleasure it can bring you if used appropriately can last much longer. Consider your investments wisely.

[Shaun Connell]

So true. I was thinking about that earlier today when I was considering a new ipod vs a weekend with friends. I'll probably go the latter route. :)

[Young Cash Cow]

With every big purchase you make, give yourself at least one week to think about it. In doing so, you'll avoid impulse buys that you'll later regret.

[Dave]

I agree with this wholeheartedly. What's the point of accumulating stuff? It's just keeping up with the Joneses. It also can be environmentally devastating.

[Miss M]

I realized this some time ago but hadn't really put it into action. Recently I've been planning outings twice a month, nothing terribly expensive. Rather than wait to make a big trip we are making day trips to spots within driving distance. Today Mr M called me at work and thanked me for the little adventures, turns out we're both happier for them. But I did order a new laptop yesterday and right now the thought of it is giving me great pleasure.

[MasterPo]

To an extent I will agree.

But I sure do get a warm feeling when I look at or use some of my possessions knowing that I finally was able to have it and enjoy it!

Materialism is not dead.

[Dana]

Makes sense, end of the day, all we have is our bodies and our memories of experiences. So what good does it do to have thousand dollar art hanging around the house? Great point there.

[rwh]

Today's NYT has a similar take on this:

http://www.nytimes.com/2009/03/24/science/24tier.html?th&emc

FWIW, we spent last week skiing in Colorado with family and friends. We could have bought something nice instead or...gasp!!!!...saved the money. No way. Skiing out west is one of my favorite things to do.

[Lee]

I do not ever remember seeing someone at an event, walking over and saying " Hi #### what have you bought lately?"

Advertising likes to make us think we will feel better if we purchase what ever it is they are selling.

But.....even as they attempt to sell us they are really only selling the (Experience) we will have when we possess their wonderful product.

[LotharBot]

Don't underestimate the value of having a nice space, though. I don't advocate spending thousands of dollars on art or buying a ridiculously oversized home, but I do advocate creating a nice, comfortable, warm, inviting space where you, your family, and your friends can hang out. Comfortable furniture, appropriate lighting, and simple decorations can be a great investment.

disclaimer: neither I nor any close friend or family member benefits directly from the sale of comfortable furniture, appropriate lighting, or simple decorations. But I have regularly had people tell me that my apartment is a warm and inviting place, and that they really like visiting.

[Dr. Frank Bonkowski]

It may be so that making “experiential” purchases - those which give you an experience and provide happy memories – can raise your present and future happiness levels. However, I like the distinction Jonathan Haidt makes between pleasure and gratification in his book, The Happiness Hypothesis. The first is sensory and emotional and it is rather short-lived. Think of your favorite ice cream and enjoying it while it lasts. The second is an activity that leads to flow, such as accomplishing something, learning something or improving yourself. Gratification (which is different from "authentic happiness" in my thinking) can come from knowing your strengths, and using them to their full advantage.

[dcs]

They forgot to mention inflation. Experiences improve with age and inflation makes them worth more than ever, while most stuff depreciates like crazy. The $10/night state park camping trips I took in my teens are worth $30/night these days, plus in my memory the weather has improved, none of the equipment malfunctions, and I never forget to bring anything. The car I bought for $16,000 in 2001, on the other hand, is worth less than $3000 now, looks dated and worn, and stuff is rattling and breaking, not improving in quality.

[James]

Thanks for writing a thorough article about experiences, happiness and financial management. I've learnt something new and hope to appreciate what I have. Awesome article!!

[Concojones]

I value experiences WAY above possessions. Always have, always will. This is also reflected in the way I spend, and it's also the ultimate reason why I save and build net worth.

That said, most great experiences are free and I urge everyone to enjoy them now that you still have the time. That's what I strive for, and I'm far from perfect in this regard.