Why Does Spending Money Make Us Happier?
January 29, 2018
Location: sitting at the desk in our villa in Playa Encuentro, Dominican Republic watching the rain over the palm trees
Life has been an absolute dream come true for me over the last few years. Today, I wanted to write about why I believe spending money on experiences makes us happier than buying stuff does.
Why am I writing about this? Well, I often find myself having conversations with people and they tell me they would love to live my life and go do the stuff I have done.
The good news is that now they can. Click here to learn more about turning your “bucket list” into your “liv’d list”.
One major reason for me writing this right now is that it’s raining outside, and it has been for the last 4 days. WHERE IS THE SUN!?!? We’re in the Caribbean, it’s supposed to be sunshine and beaches all day, right?
Well, life doesn’t always turn out that way. If it did, we wouldn’t appreciate the sunny days as much.
So here are…
7 Reasons Why Spending Money on Experiences Makes Us Happier Than Buying Stuff.
If you weren’t aware yet, the millennial generation is now the largest age demographic. Some people are probably bothered by this, because it seems like each generation has something against the other generations, for whatever reason.
Millennials “aren’t spending our money on cars, TVs and watches,” Taylor Smith, CEO and co-founder of Blueboard, told CNBC. “We’re renting scooters and touring Vietnam, rocking out at music festivals, or hiking Machu Picchu.”
Want to see something kind of funny? This is actually the scooter I have in the Dominican Republic right now…
While I would rather be driving around in a Tesla, this type of transportation works so much better for the life I live. I’ve had a scooter as my main transportation in Bali, Thailand and now the Dominican Republic. It works so well for the minimalist beach lifestyle.
It’s 0-60 time… well, honestly I don’t think this little Yamaha Jog can get to 60mph :-p
Dr. Thomas Gilovich, a psychology professor at Cornell University, believes in the Easterlin Paradox, which states that after our basic needs have been met, money will only increase happiness to a certain point for the following reasons:
Happiness over material items quickly fades.
Spending money makes us happy, we can all agree on that. Especially those of us who were raised in the USA. All the advertisements make us want to BUY ALL THE THINGS!
It’s honestly kind of crazy, but the point of advertising is to get us to want things so badly that we have to buy them. I’m in advertising and love the fact that this is true, it allows me to live this life. However, the problems arise when we realize that the things we buy, that feeling we get, it only lasts for a little while.The new iPhone, the new car, the new _______ (fill in the blank). Once we have the item and we’ve had it for a little while, it loses its appeal. It just is part of our “stuff”.Experiences on the other hand… like traveling, running with the bulls, diving with sharks, visiting waterfalls, or doing other items on our Liv List… these things stay with us. They become a part of our identity, which brings us greater satisfaction long term.Those experiences will always be with us. We’ll look back when we’re old and wrinkly and get that dumb grin on our face thinking about how cool it was that we did it.
Experiences define your purpose and passions.
We can all agree that everything we do in life should be based around our purpose and our passions, and not just because we want certain material possessions.Yes, yes… I know, it isn’t always that easy and straightforward. But, can we at least agree that our life SHOULD be based around our purpose and passions?Think of it like this… if you’re a sports fan, you have all the t-shirts, the autographs, you watch all the games… do any of those top going to the arena and watching the team play live? Of course not! I actually still think about the time I went to see the Duke Men’s Basketball team play in Cameron Indoor Stadium, standing in the student’s section with my face painted… the energy was just incredible.That right there, that single experience is better than all the shirts, hoodies, anything I could buy… and I went to that game in 2010.
Possessions don’t contribute to social relationships.
“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.”My girlfriend and I went to Machu Picchu with the Under30Experiences tour group a few years ago, and we still to this day talk to the people we had that experience with. We actually met up with one in Austin a few months back and went kayaking on the river around the city. (More experiences)
I’ve gotta say that having experiences like these are much better than the temporary feeling of just buying something.
Moments are more memorable.
While experiences tend to only last for a short period of time, they provide an incredibly high level of memorability because of anticipation.Think about some experience you’ve had. Maybe it was a concert, or show or whatever. You hear that the performer is coming to town, you anticipate buying the tickets, you anticipate attending the show once you bought the tickets, you get excited simply going in the car to get to the event… and then the event actually happens. BOOM. The whole experience is full of excitement, anticipation and memories are cemented in your brain because of that.It’s not just the couple hours of showtime that you remember. You remember the little things leading up to it as well, and how you felt before, during and after it.
Experiences introduce you to a whole new world.
Growing up in upstate New York, I had a very different perspective of the world as I have now. I had a terrific childhood and wouldn’t change it for the world. It helped shape me into the dude I am today.Random, but did you know you can get ordained as a Dudeist priest? haha no lie. I am ordained as one.
See that, a new experience you might not have known about!Over the past few years, I’ve been lucky enough to have been able to live all over the world and see just how differently people’s upbringings can be. Each of these new places opens my mind up to what life could have been like. Each time it makes me think about how great of a childhood I had.I never would have known this if I didn’t travel. Sure, I could see it on the Discovery channel or something, but when you see it in person, when you interact with people, when you’re there… that makes an enormous difference.
- The garage full of stuff – aka STUFFOCATION
Weird word, right? I didn’t make it up. Someone else did. But I liked it, so I’m using it.Is your garage jam packed with junk you completely forgot about? Does looking at it give you that feeling of “what the hell is all this shit?” If so… you might be stuffocating. Ha, that word again!Each time you see the garage full of junk, that feeling happens in your body, whether you are aware of it or not. Want to know something that’s pretty cool? You can actually list the stuff for sale on Craigslist or Facebook Marketplace… or even hold a garage sale!You can then use that money to have experiences, start a business, or buy cheeseburgers. (I don’t know what you would do with the money)
Keeping up with the Joneses is a losing battle
Every time you try to out-do your neighbor, it’ll just lead to more and more… stuff.Why would you be competing with your neighbor anyway? Who cares what they have or don’t have? Sure, the new car will be nice… for the next month or so… but what then? You’ll see the new version and want another.
“The tendency of keeping up with the Joneses tends to be more pronounced for material goods than for experiential purchases,” says Gilovich. This is because, according to research from Ryan Howell and Graham Hill, it’s easier to feature-compare material goods than experiences.“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.”What this basically means is that spending money on experiences, rather than stuff… can decrease envious behavior, which means you’ll be happier and healthier in the end.In other words, spending money on experiences can decrease this envious behavior, which means that we’ll be healthier and happier in the end.
Now is the time where I leave you with something extremely wise, and an action step so you can start spending your time and money on experiences instead of stuff.
** Inserts wise words here**
You already know what to do. Now it’s just time to do it.