Lookie there! Spend money on experiences, not things!

Published April 13, 2015   Posted in Lookie there!

Over the last couple of years, my wife and I have transitioned over to a philosophy of spending money on experiences rather than stuff – like trips to Sedona, Disney World, Glacier National Park for my birthday this coming July…even a pumpkin patch last October to get us into the mood for Halloween.

Our Hawaiian honeymoon

Our Hawaiian honeymoon

We simply enjoy experiences a lot more than stuff.  To both my wife and I, the excitement of buying more stuff just wears off much too quickly, which generally leaves yet another object that once brought a smile to my face in the back of a closet, or a car that has just become any ol’ car rather than (cue exciting sound effect) “a Cadillac”.

And according to a recent study, it looks like there may have been some wisdom behind this madness after all…that my wife and I weren’t aware of.

It turns out a psychology professor at Cornell University studied this very topic, and found a striking improvement to people’s happiness who spend their money on exciting new experiences rather than just stuff.

Cornell University professor Dr. Thomas Gilovich says that 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”.

In other words, the glamour associated with objects that we believe will provide us with happiness long into the future wears off.  That $5k watch might be cool to wear around for the first couple of weeks, but soon thereafter, you have nothing more than a nice watch.  You may still appreciate it, but your level of happiness, according to the professor, ultimately decreases.

My wife and I have found a very similar pattern in our lives.  The Cadillac CTS that I foolishly bought back in 2010 just does not provide the same level of happiness that it once did.  In fact, it did not take long for the excitement of driving a Cadillac to fade.  It soon just became “my car”.

Yeah, it might as well have been a Buick.

These purchases need not be expensive, either, to recognize this interesting happiness phenomenon.  For example, I bought about 8 different models of sport motorcycles several years ago when I rode a Yamaha R1 sport bike.  I thought having those models was pretty damn cool at the time, but now, they are just another collection of objects that sit somewhere on my shelf.

Or all those expensive cell phones that I used to buy, sometimes before my upgrade period through my cell phone carrier.  It was tremendous fun opening up the box and fiddling with my new cell phone, but after a couple weeks – let’s face it, it just became another cell phone.  I no longer thought of it as the newest iPhone, or most powerful Android, or a kick ass Blackberry.

Nah, it was just a phone I used to send and receive text messages, update my Facebook account and take the occasional phone call.

I have wasted a LOT of money on these stupid objects, continually turning a blind eye to what I knew to be true – I was spending hundreds, and sometimes thousands, of dollars on stuff in exchange for a couple weeks of happiness, at most.

Pardon my French, but fuck that.

Experiences, on the other hand, truly are bits of excitement that can remain with you for a lifetime.  They envelope you.  They grab at all of your senses, rather than just your sense of touch.  I will remember and enjoy our honeymoon to Hawaii for a hell of a lot longer than that $2000 laptop I bought years ago.

Using this history as a guide, I am sure that my birthday trip to Glacier National Park, spending this Christmas in Key West, FL and next year’s Alaskan cruise in the summer will make my wife and I far happier than the accumulation of more stuff.  And, believe it or not, we travel at a fraction of the cost.  With credit card hacking, travel is dirt cheap.

It is more than just travel, too.  Learning a new trade or starting a new hobby can be equally rewarding.  Over the next couple of years, my wife and I hope to learn how to perform home improvements ourselves, like laying tile, fixing drywall and even landscaping.  The money that we spend on books or classes that we take to learn this new skill is sure to not only save us substantial money in the future, but will instill within us that sense of accomplishment that can not be rivaled by the acquisition of more closet crap.

“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,” Gilovich said.

My wife and I couldn’t agree more.

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Comments

17 responses to “Lookie there! Spend money on experiences, not things!”

  1. Chris Muller says:

    I couldn’t agree more either! My wife and I live by the same philosophy – we are okay spending money on experiences (within reason) because the memories last so much longer. In fact, we got married in St. Lucia. We’ve since been to Turks & Caicos and Mexico, and I regret spending the money on none of those trips. There are hundreds of items in my home (or in the trash) that I do regret spending the money on – and those are material possessions. This post kicks ass Steve! I’ll be sharing it.

    • Hey Chris,

      That sounds like an awesome place to get married. You’re well traveled, more so than me. But, I’m trying to fix that. I’ve been to Mexico and loved every minute of it. It’s amazing how cheap things are down there. The hell with more crap.

      Give me a kickin’ vacation any day of the week and I’ll be a happy camper!

  2. Spot on. One of my most memorable experiences was a trip to Scotland (Islay) to tour my favorite distilleries and then hopped over to Ireland. We never got to go on a honeymoon as I worked for an asshole beer distributor who let me off early on Friday (2 hours), married on Saturday, back at work 6am on Monday.

    I also believe that getting rid of stuff can make you happier too…clearing out the crap that you built up is like a nice purge.

    • Hey Brian,

      Wow, sounds like that beer distributor truly was an asshole. I bet he felt generous, too, by giving you that additional 2-hours of time off. Life is much too short to work for people like that. Good on you for fixing that little situation. 🙂

      I agree that the purge is nice too. When I moved into my wife’s home shortly before we married, I went through that process in my old house. It’s just amazing how much stuff piles up over the years that you just live with and don’t even really notice. Crap here, crap there. Just piles of junk. All paid-for junk, too.

      Your trip to Scotland sounded like a blast. I wanna do that. 🙂

  3. I’ve made this transition as well over the past few years. I sold my car once I moved to NYC, and now share an apartment with two of my friends. With those costs I cut I’m able to travel (2 cruises planned this year, trip to Appalachian mountains, and a couple bachelor parties). While that might seem a little over zealous for someone in the FI/RE community, my other expenses are extremely low and therefore I’m still able to max out 401k, IRA, HSA, while paying down debt and saving elsewhere. So therefore this is not an area I will cut back on as there are the things I know I’ll remember for years to come. Not some fancy watch or car.

    • Americans waste a TON of money on cars, and the fact that you don’t have one probably does free up a lot of resources to do much more enjoyable things like, in your case, travel. Like you, my wife and I enjoy traveling as well. We have 5 trips planned this year (one was taken back in January). The big one this year is Glacier National Park in July. Next year, it’s our cruise up to Alaska in the summer.

      Definitely looks like you’re doing it the right way. You definitely have your priorities straight – I sure wish I did earlier in my life. Oh well…all’s well that ends well, right? 🙂

  4. We definitely live this way — in theory. And where we find that it gets sticky, or becomes a slippery slope, is outdoor gear. Because it lets you DO more things, have more experiences. We live in an outdoorsy town, so this is a constant temptation and struggle. It’s easy to justify a new pair of skis, a new backpack, a new water bottle… but ultimately it’s all just STUFF. Totally agree with you and other commenters — travel is worth it. We have never regretted our spending on trips, even some of the splurgier ones.

    • True, the ability to DO more things outdoors might also encourage you to spend more on peripherals. But in the end, we still ultimately come back to one question: are those skiis (or whatever is in front of us) worth nixing our vacation plans for later in the year?

      Almost always, the answer is “nope”.

  5. LaTisha says:

    Totally agree. My husband and I prefer to spend on experiences. That’s the primary reason we had a small wedding, so we could spend more on the honeymoon.

  6. Definitely agree, but outside of the personal finance community, I think we’re in the minority. Great article!

    P.S. You had 8 motorcycles!? Where did you put them all???

  7. Jason says:

    All I can say is here, here! Now, I actually combine the experience and work together. I know that sounds weird, but I can get my university to pay for me to go abroad and I can bring my wife with for little to no money. Definitely would rather do that than buy crap I don’t need.

    • That sounds fantastic, Jason – you’re taking well advantage of your job that lets you travel by bringing your wife with you and making an experience out of it. That is exactly what I’d do if I were in your shoes as well. Good choice. 🙂

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