Advertisement
spending

To Be Happier, Favor Experiences Over Things

While the stuff we own grows old and obsolete, memories of things we did are often burnished with time.

What’s on your holiday wish list? Or your shopping list? A bunch of stuff, most likely. But if you really want to make someone happy, skip the sweater and give an experience—concert tickets, maybe, or a dinner out. And if you want to be happier yourself, aim for doing something instead of owning something. Research shows that experiences make people happier than things do, and that has implications not just for the holidays, but for the family budget, the economy and society at large.

Tom Gilovich has been studying the relative merits of doing versus owning for years. The Cornell University psychology professor has found that ex­periences are more satisfying than possessions in part because experiences connect you with other people more than material goods do. You may get a kick out of talking about your new iPhone with another Apple fan. But you feel more kinship with someone with whom you’ve shared a trip or a meal. The feeling of kinship often extends to people in general, not just to those with whom you have experiences in common.

Advertisement - Article continues below

That’s because experiences reflect more of ourselves than do material goods. “I’m not saying that you don’t invest some of your identification in your clothes, house or the car you drive,” says Gilovich. “But however invested you are in material possessions, they remain out there, separate from you. But we are, arguably, the sum total of our experiences.” Experiences are likely to be evaluated on their own terms. By contrast, says Gilovich, we tend to want to keep up with the Joneses when it comes to our stuff.

Advertisement
Advertisement - Article continues below

It’s also more fun to anticipate an experience in the future than it is to wait for a tangible good. The former usually triggers excitement; the latter, often impatience. And while the stuff we own grows old and obsolete, memories of things we did are often burnished with time. We reflect on the accomplishment and the scenery of the climb up the mountain and dwell less on the mosquito bites or the skinned knee.

Advertisement - Article continues below

Millennials get it. People born in the years leading up to the 21st century are hip to the happiness power of experiences, and their spending reflects it. In 2015, according to J.P. Morgan, 34% of credit card and debit card spending by millennials went toward experiences, categorized as dining (16%), entertainment (12%) and travel (6%); just 28% of spending by other age groups was earmarked for spending on experiences. A 2014 survey by Harris Interactive for Eventbrite, an event promotion and ticketing site, found that 78% of millennials would choose to spend money on a desirable experience over buying a desirable thing. “I definitely prioritize travel, and ex­periences while I am traveling,” says Vanderbilt PhD student Sierra Palumbos, 25. She scrimps on rent by living farther from campus but has toured 18 national parks and recently traveled to Thailand, Malaysia and Cambodia.

The growing experience economy is bad news for department stores, where sales have slumped 5% from a year ago and are down 12% in the past four years. But it bodes well for experience purveyors, such as cruise lines, restaurants and the entertainment industry. Just don’t get the idea that experiences have to be vacation-caliber to matter. “It doesn’t have to be a trip to Rome. If you’re out hiking in your local park and the sunset breaks just right, you’re going to be moved,” says Gilovich. And what holds true for individuals is true for society overall, he says. He applauds urban design that builds in experiential infrastructure, such as hiking and bike trails, libraries and concert halls.

There’s no need to become an ascetic and give up your material goods—and yes, you still have to write a thank-you note for that sweater from the in-laws. But during this holiday season, and as you ponder your budget at the start of the new year, consider tilting your spending toward experiences. It just might make 2017 a little brighter.

Advertisement

Most Popular

What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
Tax Changes and Key Amounts for the 2020 Tax Year
tax law

Tax Changes and Key Amounts for the 2020 Tax Year

Americans are facing a long list of tax changes for the 2020 tax year...and it's never too early to start thinking about next year's return.
June 22, 2020
10 Tax Breaks for the Middle Class
tax deductions

10 Tax Breaks for the Middle Class

Tax breaks aren't just for the rich. There are plenty of them that are only available to middle- and low-income Americans.
June 30, 2020

Recommended

Sales Tax Holidays in 2020
state tax

Sales Tax Holidays in 2020

Sixteen states are having sales tax holidays this year. If you plan your shopping around these tax-free periods, you can save big on back-to-school cl…
July 1, 2020
For Financially Responsible Kids, Do NOT Do These 3 Things
family savings

For Financially Responsible Kids, Do NOT Do These 3 Things

The key to putting your kids on the right financial path can be boiled down into one sentence.
July 1, 2020
10 Tax Breaks for the Middle Class
tax deductions

10 Tax Breaks for the Middle Class

Tax breaks aren't just for the rich. There are plenty of them that are only available to middle- and low-income Americans.
June 30, 2020
13 Luxury Goods That Are Cheaper at Costco
spending

13 Luxury Goods That Are Cheaper at Costco

You could be missing out on huge savings: Costco sells a limited selection of luxury goods at discounted prices, both in-store and online.
June 27, 2020