Why You Should Spend Your Dollars On Experiences, Not Things

We’re all familiar with the old adage that money can’t buy happiness. But according to new research points to putting our dollars into creating positive experiences will make us happier than investing in material goods.

A psychologist from Cornell University has been studying the intersection of how we spend our disposable income and happiness for the past twenty years. His findings are both powerful and straightforward. Simply put: if happiness is what you’re after, don’t spend your money on stuff.

There are a few key points that back up this assertion. The first truth is that no matter how shiny and new a possession is, it will get old and lose its mental luster. What was once a treasured, novel item quickly becomes the norm. We think the happiness we feel from a big purchase will last a long as the item we bought. Not so, says the research. Secondly, when we make new purchases, we subconsciously raise the bar for the next big-ticket item. Our emotional response to our next buy will be based on it being bigger and better than the last item we purchased.

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And finally, we tend toward trying to keep up with the Joneses. We all know the feeling that the grass is greener on our neighbors’ lawns.  But happiness researchers point out a key flaw in comparing ourselves (and our possessions) to others. There will always be someone with a newer model or fancier brand. If we set up material comparisons, we will undoubtedly be disappointed.

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These charts show US consumer trading goods for “experiences”

What’s the underlying theme here? Adaptation. According to the research from Cornell, adaptation is what makes the joy derived from material things so fleeting. Something can be a new and exciting addition to our possessions, but over time we adapt to it.  Because we adapt to our new toy, it loses the initial thrill we had when we first bought it. This is true for everything from a bigger television to a new car. Over time, the newness just wears off.

How do we make our happiness last? Science says invest in experiences, not things. Our experiences shape how we see the world. Positive experiences make up the fabric of our lives – they create memories and feelings that can last a lifetime, unlike material goods. So the next time you find yourself eyeing a glitzy, hot item in the store, take a step back. Consider how you could translate the money for the material good into something more meaningful, like a trip to Europe or a trip to the spa. You’ll be happy you did.

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