Greetings from frigid Omaha. One upside to this comically cold weather is that I’ve had a little more time than usual to just sit by the fire and catch up on my reading. As I worked through my “articles to read” pile, the results of a recent study caught my eye and I thought it would make a worthy edition to our How To Be Happy series.
When money buys happiness
You’ve heard me say before that when spending your money, you should focus on experiences instead of stuff. The idea being that a life spent in dogged pursuit of rich experiences will usually have a much better payoff than one seeking the latest gadget or gizmo.
Of course, it’s easy to dismiss that as just one person’s opinion. After all, some people would prefer a trip to Hawaii or a day at the ballpark, while others prefer a flat screen television or a Louis Vuitton handbag. Now there’s actually research that shows that you should probably choose the trip over the handbag.
The study, conducted by Ryan Howell, assistant professor of psychology at San Francisco State University, shows that buying experiences instead of possessions leads to greater happiness. Why? According to Howell, experiential purchases satisfy higher order needs by making us feel alive and connected to others. “Purchases that increase psychological need satisfaction will produce the greatest well-being,” says Howell.
Not only that, but buying experiences tends to provide more lasting satisfaction (regardless of your income or the amount spent) because they provide what Howell describes as “memory capital.” In other words, experiences come with memories and those memories accumulate and contribute to your happiness for as long as you’re alive.
Just to be clear, I have nothing against stuff. I like nice things just as much as the next guy, but I think our society has the ratio wrong. There’s so much pressure to buy things that people are often tapped out when it comes to buying experiences (if only I had a dollar for every time someone told me “I wish I could afford to travel” right before climbing into their $40,000 SUV).
So as you think about your budget this year, keep Howell’s spending study in mind. Stuff is fine, but experiences will probably make you happier.