Contrary to what your mom told you, maybe money can buy you happiness, but only if you spend it the right way. According to a recent study by researchers at Cornell University, published in the Journal of Personality and Social Psychology, money spent on experiences yields greater, longer-lasting satisfaction than money spent on consumer goods. The researchers, Travis J. Carter and Thomas Gilovich, offer a number of thoughtful explanations about why this might be the case.The very nature of material goods and purchases makes them easier to compare. Physical goods have comparable features. If you decide to buy the car with the most room and the cushiest seats, you might well be choosing not to buy the sportiest looking model or the one with the best fuel economy. These features are the facts of your purchase — and are subject to reconsideration after purchase.The scientists point out that it is much harder to compare experiences on a feature-to-feature basis, because most experiences simply don’t respond to that kind of study. If you decided to spend a week at an all-inclusive beach resort in Mexico instead taking the same week on the ski slopes of Vermont — you’ve probably made a choice based on your imagination of what the two experiences might be like, but you can never truly compare the two experiences.The researchers also point out that it is relatively easier to compare something you buy to something you could have had and have mixed feelings about the thing you didn’t choose. The physical objects are easy to compare; it is much harder to compare the experience you had with one you never had, so it is likely you’ll feel more satisfied with your experiential choice.Carter and Gilovich felt that the perhaps the most important distinction between goods and experiences boils down to the fact that experiences seem to have more emotional value to us than goods ever can. In the end, experiences become a part of who we are, while goods are always external.
Think about this in the context of your own life, and I bet you’ll agree it’s true. If you buy the very latest iPod with the very best features, it’s entirely likely that Apple will come out with a newer, smaller, flashier model in a matter of months. Your old iPod doesn’t sound any worse, but you end up feeling left behind and your iPod feels devalued.
Now think about the last vacation you took, or the last time you went out to dinner with friends. If it was even a reasonably positive experience, chances are it has become a part of who you are, literally and figuratively speaking. That experience is yours and it can never be taken away or devalued. It sustained you, restored you, brought you closer to people in your life. That sounds like money well spent.
Andy Knight, meQuilibrium Product Team
Read the original study for yourself
Key Thought:
Researchers have found that money spent on experiences yields greater, longer-lasting satisfaction than money spent on consumer goods.