A slew of studies released in the past few years have shown that counter to prevailing logic, the purchase of experiences – such as a family trip – make us happier than the purchase of things – such as a new house or a new car. On the surface it seems a better investment to spend a significant sum on a new car, which we will use and enjoy for years, rather than a family trip to Hawaii, which will be over and done in two weeks. But apparently not, for a number of reasons…
First, studies have shown that anticipating an experience elicits more happiness and excitement than waiting on a material good; waiting for a possession tends to be tinged with frustration rather than gleeful anticipation. Think about looking forward to that beach trip as opposed to waiting in line for a new iPhone. Some have hypothesized that anticipating an experience opens a world of possibilities and imagination – we’ll swim in the ocean, and walk on the beach, and eat at our favorite restaurant – while anticipating the possession of a material good is more limited – my new iPhone will have a bigger screen.
Secondly, with experiences we are less likely to fall victim to “keeping up with the Joneses”. People are less likely to measure the value of their experiences by comparing them to those of others – which is not always the case when it comes to our material possessions, such as our homes and cars and gadgets. So therefore experiences bring us more happiness, as they tend to remain untainted by the stain of envy and covetousness.
Most counterintuitively, studies have shown that in the long run, experiential purchases make us happier than material purchases, even though the material purchase is physically present for far longer. This is because as human beings, we have a remarkable capacity for what’s known as “hedonistic adaptation” – we stop appreciating things to which we are constantly exposed. The thrill of the new iPhone wears off after just a few days, but the trip to Hawaii – we’ll remember that with fondness for years to come.
And here’s another thing: our material possessions deteriorate and become obsolete over time. The new car gets a few dings in it. Our cool new iPhone is usurped by a later and greater version. But our memories of experiences actually get sweeter with the passage of time. Even a difficult and unpleasant experience – say that camping trip when the dog threw up all over the inside of the tent – becomes a great story.
Most important of all, purchased experiences are usually not solitary endeavors; we tend to share them with others. These shared experiences bond us more closely to those we love, and the act of remembering those experiences, over and over in the years to come, solidifies and strengthens those bonds. The latest iPhone, in all its technological glory, doesn’t come close to that kind of return on investment.
So if you’re thinking about investing your time and money in either an experience or an object – pick the experience. It will bring you far greater returns over the long run.
Wallace serves as Chief Financial Officer of Trust Company, as well as overseeing the Human Resources function. She is a Certified Public Accountant, and joined Trust Company in 2004 after an eight year career in public accounting with Arthur Andersen, and several years as a controller in a not-for-profit organization.