Money and Happiness

Money and Happiness

“Money and Happiness” written by Guest Contributor.

When you get a windfall of money, are you more likely to spend it on a weekend getaway or the latest new gadget?

How you answered this question could be an indicator of your happiness.  This blog post will discuss the relationship between money and happiness, specifically what you spend that money on experiences or possessions.

Research on Experiences and Happiness

Thomas Gilovich, professor and chairman of the psychology department at Cornell University and colleague Leaf Van Boven’s, conducted surveys of how people felt about their possessions and experiences, publishing their findings in 2003. They asked their subjects to think about “life experiences” or “tangible objects” they had purchased. The students were asked to describe how happy these purchases had made them.

The Results of the Money and Happiness Research

The results? The experiences made them happier.

Happiness is based on experiences, not material possessions.

Let’s Think About These Money and Happiness Scenarios

Here are a few of the many reasons why buying an experience make us happier than buying an object

1) Possessions can become obsolete quickly. There’s always a new and better gadget right around the corner. For instance, Apple releases a new mobile operating system every year to keep this cycle going.

2) Possessions lose their luster. We stop appreciating things to which we are constantly exposed. That’s in part because the initial joy of acquiring an object, such as a new car, fades over time as you become accustomed to seeing it every day.

3) Possessions can add worry to our lives. We worry about someone else having a bigger and better car, boat or house and we need to maintain them and protect them from getting stolen.

4) Let’s be honest, sometimes we buy things to keep up with the Joneses. The Joneses may not care as much as you would like. When they are not ooing and aging over your shiny new car, you might end up disappointed in others response to your possessions. Experts also point out that people are less self-conscious when comparing experiences than they are about possessions. For example, It will probably bother you more that your friend’s house is bigger than yours than if your friend saw more sights on her Hawaiian vacation.

5) It turns out the happiness begins even before we make a purchase. Waiting for an experience brings more happiness than waiting for a material object.

How many Christmases do you remember the exhilaration and excitement of anticipating the presents and the big day? Then long after the presents were discarded and the candy was eaten, you had a memory of waking up with your family, Christmas dinner and visiting relatives. Experiences are more abstract. You can think of all the wonderful scenarios of how your experience will play itself out. On the other hand, with an object there are not as many variables. Experiences unlike possessions give a sense of relatedness to others — getting closer to friends and family.

Experiences form powerful and important memories that most wouldn’t trade for anything in the world.

Waiting for a possession is more fraught with impatience..” I want it now!”

6) We don’t compare our experiences with others as much as our possessions

For example, many people are unsure if they would rather have a high salary that is lower than that of their peers, or a lower salary that is higher than that of their peers. With an experience  like a vacation, that dilemma doesn’t hold. Would you rather have two weeks of vacation when your peers only get one? Or four weeks when your peers get eight? People choose four weeks without hesitation.

7) Another reason for increased happiness in experiences, the researchers found, was that people felt a greater sense of vitality or “being alive” during the experience and in reflection.

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Closing Thoughts on Money and Happiness

Now, it’s not all cut and dried. We can buy things that give us good experiences. Such as the fun you have driving that new sports car. The key here is whether or not your driving it alone. Research show buying a possession you are going to use socially brings you more happiness. If you buy a monooly game its to have social experiences.

No possession has intrinsic value. Its value is the promise of happy experiences and the act of giving or receiving an object as a gift is an experience in itself.

Gifts of material possessions often become keepsakes and have sentimental value that increase with time, instead of diminishing like most material goods.

Researchers are unsure if happy people buy experiences, rather than experiences buying happiness. A recent study by three psychologists, Ryan T Howell, Paulina Pchelin and Ravi Iyer gives a sense of how this might be possible: they found that people with a tendency to spend money on experiences were already emotionally appreciative of the world; they also tended to buy more experiences the happier they became.

Bottom line…We know its best to be in the moment and minds will tend to wander to negative thoughts unless you have an experience to either anticipate or remember. So If you can’t be in the moment, its best to be either anticipating a great event or remembering a great past event. If you are going to buy possession to increase your quality of life be aware of the pitfalls. It’s best to buy objects to be used socially or that have some lasting sentimental value.

Here’s to YOUR happy experiences!


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