Live by experiences, not objects

Most people pursue happiness.  We know that you cannot buy happiness, but having adequate money eases life’s pressures making you feel happier.  One of the biggest questions we all ask ourselves is how we should allocate our time and money.

Most people make a very logical assumption when it comes to spending money; physical objects last longer, and make us happier, than one off experiences, such as a concert or a vacation. However, research suggests the opposite is in fact true.

Dr. Thomas Gilovich, a psychology professor at Cornell University has been studying the question of money and happiness for over two decades:   “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.”

Rather than buying the latest iPhone or BMW Gilovich suggests you’ll get more happiness spending money on experiences such as going to art exhibits, doing outdoor activities, learning a new skill, or travelling.  While the happiness from material purchases diminishes over time, experiences become an ingrained part of our identity.

Gilovich’s research also demonstrates that shared experiences connect us more to other people than shared consumption.  Even if someone wasn’t with you when you had a particular experience, you are much more likely to bond with them if you have both hiked the Appalachian Trail, than if you both own Fit bits.

Gilovich’s research has implications for individuals who want to maximise their happiness return on their financial investments, and for employers who want to have a happier workforce. If we take this research to heart, we could see a shift in spending patterns.