Conscious Spending: Things vs. Experiences

It’s official: Experiences make people happier than possessions. Okay, not really, but it is the conclusion taken from a recent psychology study as reported in this CNN Health article:

The study looked at 154 people enrolled at San Francisco State University, with an average age of about 25. Participants answered questions about a recent purchase — either material or experiential — they personally made in the last three months with the intention of making themselves happy. While most people were generally happy with the purchase regardless of what it was, those who wrote about experiences tended to show a higher satisfaction at the time and after the experience had passed.

This would suggest that in general, experiential purchases such as eating out, watching a musical, or traveling would produce greater happiness than material purchases. I wouldn’t say this qualifies as a landmark study, as it only surveyed 154 young Californian students (not exactly a large and diverse sample size). However, it should encourage us to look back on our own past purchases and consider carefully which ones had the most value to us. Prioritizing is the first step to spending consciously and cutting out the excess purchases.

A related note is that the researcher also stated that people adapt to a new purchase in six to eight weeks, up to a maximum of three months. That means the initial pleasure we get from a new possession generally fades in a matter of months. That darn hedonic treadmill again.

Hey, doesn’t this just about coincide with Apple’s product cycle? Just in time after the buzz from your new iToy starts to fade, there is another iToy 5G+ to make you happy again. Here’s a quote straight from a recent BusinessWeek article about why Apple is still going strong:

“For many people in this economy, Apple is what makes them happy,” said Shaw Wu, a senior analyst with Kaufman Brothers LP in San Francisco. “Its products make their lives easier and provide some entertainment, at a time when people don’t feel good about a lot of other things in their lives. It sounds silly, but it’s not that far from the truth.”

But again, perhaps buying some happiness every six months is fine, as long as it fits your financial priorities.

Comments

  1. This study is a bit bias. Most 25 year-olds haven’t been working long enough to make many big purchases and be responsible for a family and home. Also, people of this age are usually hungry for experience.

  2. How about AN apple, rather than apple? Cheaper, yummy, and healthier for you, your wallet (if not the CEO of apple – but I can live with that), and the planet! Go on, try it!

  3. I agree with Vern about the study focusing on 25 yr olds. I will say in my experience, an experience such as a trip will last a lifetime in memories unless one obtains alzhiemers (sp?) on the other hand a material item may not last as long in memories but is something you can enjoy longer then the typical 2 week vacation. Unless you are fabulous rich, life is a balancing act to try and achieve maximum happiness with life experiences and material items while at the same time paying a mortage, saving for retirement & paying for childs education. This is why a have such a hard time when you see these wealthy people that are unhappy, go out get happiness, you have the resources to do it.

  4. I don’t like the conclusions of this study, at all.

    Obviously new purchases are more exciting initially (and even more exciting before you buy them), but the novelty wears off quickly.

    That said, I have seen this discussed often and the conclusion is that only experiences (i.e. vacations) make us happy.

    Uh uh, no way. I rather buy something I can enjoy for a long time than go on a 1 or 2-week vacation, personally. Secondly, if I did the same vacation more than once, the novelty would start to wear off. The same psychology still applies to experiences. You always want new and better experiences, too.

  5. I don’t think the point of the study is that experiential purchases make us happier, it’s that they make us happier, longer.

    I’d say that this holds true for me. Let’s say I spent $200 on a great smartphone and $200 on a blowout, awesome dinner. In a year, I’ll remember that dinner very fondly, but that smartphone? I’m going to be itching to replace it. It’s just gonna feel old.

  6. I agree with the statistic. I love experiences over possessions. Although when I do travel, I tend to enjoy buying something that reminds me of the experience. I’m on the cheaper side of things. I love smooshed pennies for this reason. Cheap, small and a good reminder of various US trips.

  7. Interesting article, but your closing paragraph kind of got me. “buying some happiness every six months” – unfortunately, if that’s how you ‘buy’ happiness then it will cost you a lot.

    Buying stuff is not satisfying your craving, or if does than you’ll end up being an addicted buyer which will definitely kill your budget and financial life and your personal life.

    I love apple products, but my happiness doesn’t interfere with owning their products. Every new thing wears off it’s excitement … then what?

  8. Very much a personal decision, but I don’t get it. I would forego twnety years of Apple “crap” to take one overseas trip.

    Experiences have to win out over material things by definiton of human nature.

    In my humble opinion, of course

  9. I too take issue with the test subjects’ age and stage in life. Like David says, this is a personal issue and I’m willing to bet that this conclusion would depend highly on an individual’s tastes and preferences. I would personally rather have an iphone than a blow-out $200 dinner, but Roberto wouldn’t.

    Also, the study is a bit misleading as THINGS often translate into EXPERIENCES in and of themselves. A big tv might mean more movie or game nights with friends. A new car might give someone the experience of having peace of mind when they drive that their car won’t break down. Ultimately, these things can vary so widely from person to person.

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