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[POP-CULTURE/TRENDS] FACTS ABOUT SPENDING YOUR MONEY ON GATHERING EXPERIENCE NOT MATERIAL THINGS

Most people are in the pursuit of happiness. There
are economists who think happiness is the best
indicator of the health of a society. We know that
money can make you happier, though after your
basic needs are met, it doesn’t make you that much
happier. But one of the biggest questions is how to
allocate our money, which is (for most of us) a
limited resource.
There’s a very logical assumption that most people
make when spending their money: that because a
physical object will last longer, it will make us
happier for a longer time than a one-off experience
like a concert or vacation. According to recent
research, it turns out that assumption is completely
wrong.
“One of the enemies of happiness is adaptation,”
says Dr. Thomas Gilovich, a psychology professor at
Cornell University who has been studying the
question of money and happiness for over two
decades. “We buy things to make us happy, and we
succeed. But only for a while. New things are
exciting to us at first, but then we adapt to them.”
So rather than buying the latest iPhone or a new
BMW, Gilovich suggests you’ll get more happiness
spending money on experiences like going to art
exhibits, doing outdoor activities, learning a new
skill, or traveling.
Gilovich’s findings are the synthesis of
psychological studies conducted by him and others
into the Easterlin paradox, which found that money
buys happiness, but only up to a point. How
adaptation affects happiness, for instance, was
measured in a study that asked people to self-report
their happiness with major material and experiential
purchases. Initially, their happiness with those
purchases was ranked about the same. But over
time, people’s satisfaction with the things they
bought went down, whereas their satisfaction with
experiences they spent money on went up.
It’s counterintuitive that something like a physical
object that you can keep for a long time doesn’t
keep you as happy as long as a once-and-done
experience does. Ironically, the fact that a material
thing is ever present works against it, making it
easier to adapt to. It fades into the background and
becomes part of the new normal. But while the
happiness from material purchases diminishes over
time, experiences become an ingrained part of our
identity.
“Our experiences are a bigger part of ourselves than
our material goods,” says Gilovich. “You can really
like your material stuff. You can even think that part
of your identity is connected to those things, but
nonetheless they remain separate from you. In
contrast, your experiences really are part of you. We
are the sum total of our experiences.”
One study conducted by Gilovich even showed that
if people have an experience they say negatively
impacted their happiness, once they have the
chance to talk about it, their assessment of that
experience goes up. Gilovich attributes this to the
fact that something that might have been stressful
or scary in the past can become a funny story to
tell at a party or be looked back on as an invaluable
character-building experience.
Another reason is that shared experiences connect
us more to other people than shared consumption.
You’re much more likely to feel connected to
someone you took a vacation with in Bogotá than
someone who also happens to have bought a 4K
TV.
“We consume experiences directly with other people,”
says Gilovich. “And after they’re gone, they’re part
of the stories that we tell to one another.”
And even if someone wasn’t with you when you had
a particular experience, you’re much more likely to
bond over both having hiked the Appalachian Trail
or seeing the same show than you are over both
owning Fitbits.
You’re also much less prone to negatively compare
your own experiences to someone else’s than you
would with material purchases. One study
conducted by researchers Ryan Howell and Graham
Hill found that it’s easier to feature-compare
material goods (how many carats is your ring? how
fast is your laptop’s CPU?) than experiences. And
since it’s easier to compare, people do so.
“The tendency of keeping up with the Joneses tends
to be more pronounced for material goods than for
experiential purchases,” says Gilovich. “It certainly
bothers us if we’re on a vacation and see people
staying in a better hotel or flying first class. But it
doesn’t produce as much envy as when we’re
outgunned on material goods.”
Gilovich’s research has implications for individuals
who want to maximize their happiness return on
their financial investments, for employers who want
to have a happier workforce, and policy-makers who
want to have a happy citizenry.
“By shifting the investments that societies make and
the policies they pursue, they can steer large
populations to the kinds of experiential pursuits that
promote greater happiness,” write Gilovich and his
coauthor, Amit Kumar, in their recent article in the
academic journal Experimental Social Psychology .
If society takes their research to heart, it should
mean not only a shift in how individuals spend their
discretionary income, but also place an emphasis on
employers giving paid vacation and governments
taking care of recreational spaces.
“As a society, shouldn’t we be making experiences
easier for people to have?” asks Gilovich.

Credits: Jay Cassano.

Posted by: @djshyluckjimmy
facebook/inatagram: @jimmyadesanya.

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