Researchers say money can buy happiness—if you spend it right
Want to be the bearer of really good tidings this season? Give an experience instead of a material item, say researchers. Pick a farm-to-table food tour over the paisley tie and matching sweater. Reserve a hot springs trip for two rather than purchasing that sparkly necklace. Book a rock climbing class for you and your best buddies instead of buying those matching T-shirts you’ve been eyeballing. (Trust us. They don’t want them.)
A growing number of studies show that money spent on life experiences results in more happiness than buying more stuff. And this principle applies to gift giving, too.
In the early 2000s, psychology professors Tom Gilovich and Leaf van Boven surveyed more than 12,000 Americans about their purchases. Participants were asked to consider both an experiential purchase and a material item they had bought with the hope of increasing their happiness. They then asked them to identify which had actually made them happier. The conclusion? Most selected the experience over the object.
According to Gilovich and Van Boven, experiences result in more joy “because they are more open to positive reinterpretations, are a more meaningful part of one’s identity, and contribute more to successful social relationships.” In less academic terms, you can feel adventurous when you take that kayaking class with your best friend, and you can laugh with them later about how you kept making the boat go in circles.
More recently, Ryan Howell, San Francisco State University associate professor of psychology and director of SFSU’s Personality and Well-Being Lab, determined that life experiences help us reaffirm who we really are and “satisfy our need to express our identity.”
Howell and his team have also been digging into whether or not people realize that life experiences make them happier. And, if we do know, why don’t we spend more of our income on these activities.
What he found was that people—overwhelmingly—know that life experiences will make them happier. So why aren’t we spending our money accordingly?
“The problem is,” he says, “we think that material items will feel like a better use of our money. We think, ‘I'll be able to reuse that iPad’ or ‘Every Friday I'll use my fondue set and therefore it’ll make me happy.’”
It’s a “good value” issue, he adds. It's hard to place a dollar amount on our memories, so people often underestimate just how valuable they are. “They think that there's this tradeoff—it's either happiness or a sense of value,” Howell says. “The problem is, it's not a trade off. You actually can get both from life experiences.” (He does note that funds must be of the discretionary sort—after basic needs are met. Going into debt or putting yourself into financial stress to do things is “quite detrimental,” he says.)
There is one interesting caveat to material spending. When the purchase is an item to be used for an experience—for instance, a mountain bike, a surfboard, or a pair of shiny new running shoes—people gain a lot of pleasure.
In response to this, Howell and one of his students started working on a third category, which they call experiential products. Basically, these are items designed to provide or enhance an experience.
“To our surprise,” he says, “they actually provide the exact same amount of happiness as life experiences. It’s really only those purely material items that don’t do anything. Passive items like clothes, jewelry, and furniture—the stuff you don’t engage with—that doesn’t really move the needle very much.”
The why behind it was also surprising.
Experiential products and actual experiences are meeting two different desires. “Experiential products help meet our need for competence and make us feel like we're mastering or improving some sort of skill set. Whereas life experiences bring us closer to friends and family,” says Howell. “Those two different paths are just arriving at the same place.”
When it comes to choosing the specific kinds of experiences, Howell says what’s important is the “person fit.” “Some people like to go to baseball games because they're baseball fans, and some people like to go to museums because they like art,” he says. “We've collected a lot of data on this and no one experience rises to the top.”
In other words, if you’re giving an experience, make sure that it matches your friend or family member’s interests and not your own. Just because you’ve always wanted to go skydiving, doesn’t mean your food-tour-loving aunt has been itching to jump out of a plane with you. “Most people do buy experiences that are true to their personalities,” says Howell. “When people feel like they're forced into doing something that’s inauthentic, then you get no happiness benefit.”
Luckily, there’s a whole world of experiences out there to choose from. And remember, if you keep the recipient in mind, your experiential gift will likely increase in value—well beyond what you could predict. Now that’s something to “holiday” cheer about.