Happiness

Spending Money On Experiences Makes You Happier

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If you've ever waffled over whether or not you should splurge on a big purchase like, say, a new car, or save up for that big trip to Europe you've always dreamed about you're not alone. A psychologist who has spent his life exploring the idea of living in the moment teamed up with a Cornell psychology professor and a doctoral candidate in an attempt to answer this question: does spending money on experiences make people happier than buying things?

Related: You'll Likely Be Happier If You Choose Time Over Money

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We Appreciate Vacations More Than Posessions

You didn't realize you hated your old couch until the exact moment you laid your eyes on an on-trend, blush-hued loveseat from a fancy furniture store's website. Sure, it's more than half your rent, and that trip to Mexico will have to be put on hold, but it's beautiful. You deserve it. Your excitement grows as you quickly confirm your purchase. Then, a strange thing happens...the couch takes forever to ship, making you a bit impatient. When it finally ships, you have to take time off work and wait for the dang thing to be delivered. You actually said no to a vacation for this?! According to Matthew Killingsworth, Thomas Gilovich, and Amit Kumar's 2014 study in the journal Psychological Science, that was a mistake.

Related: Does Money Buy Happiness?

As The Atlantic puts it, the emotion you feel while waiting for a material good, such as your trendy couch, to arrive is more likely to be impatience than excited anticipation. Plus, people get what's called a "hedonic adaptation," where things we're constantly exposed to just become background noise. How long will it take before your excitement over that new couch turns into the same hum-drum feeling you had for your old one?

Related: Want To Be Happier? Do One Creative Thing A Day

That's all well and good, but experiences are fleeting too, aren't they? Yes, but not in the psychological sense. People feel more joy before, during, and long after an experience. This study claims that, unlike the impatience of waiting for your couch, waiting for a trip to Mexico with your friends would've been pleasant and exciting. Upon your return, the trip would give you a sense of nostalgia, with no risk of it disappearing into the background of your other daily thoughts. You know what you're getting when you purchase a couch—and it gets old—whereas the outcome of a vacation is somewhat mysterious. Not to mention, it's much more fun to hear stories about a crazy trip to Mexico than to hear about your velvet couch. (Just saying.)

You'll Thanks Us Later

Kumar notes to The Atlantic that this study's findings imply "notable real-world consequences." Gaining material possessions is often about instant gratification, putting on appearances, and keeping up with the Joneses. Buying experiences is associated more with identity and social connection. Kumar explains that if people are waiting in line for material goods, they're much more likely to treat each other badly (Black Friday shopping, anyone?). When people are waiting in line for an experience, such as a concert or a new brunch spot, they're more likely to stay positive and also be gracious and generous to others. You might enjoy looking at your new couch right now, but you'd forever be grateful for the time spent with friends drinking poolside margaritas.

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Watch And Learn: Our Favorite Videos About Money And Happiness

The Science of Smarter Spending: Buy Experiences

"Stuff isn't good for you. It doesn't make you unhappy, but it doesn't make you happy." –Harvard Business School Professor Michael Norton

Can Money Buy Happiness?

Additional income beyond $75,000 doesn't actually have an impact on happiness.

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Key Facts In This Video

  1. Beyond $75,000, American workers don't experience additional happiness with an increased salary. 00:21

  2. Giving money to others has been shown to increase happiness and overall emotional well-being. 01:30

  3. The ways in which money is spent also has a significant impact on a spender's happiness. 01:52

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