Spending money can make us happy, but the longevity of that happiness depends on what we spend it on. Stuff like clothes, shoes, furniture and cars don’t make us happy (despite what we may think at the time of purchase), but experiences definitely do.
Professor Ryan T Howell, an Associate Professor of Psychology at San Francisco State University, and his student Paulina Pchelin, undertook a study into the link between money and happiness and discovered that when it comes to long-lasting happiness, experiences trump material possessions.
Their paper, The Hidden Cost of Value-Seeking: People Do Not Accurately Forecast the Economic Benefits of Experiential Purchases, reveals that spending money on a family holiday or going to see your favourite rock band will give you greater satisfaction than buying a car, couch or designer handbag.
Howell’s study also showed that most people spend more on materialistic things in the belief that a new car, for example, lasts longer than a family holiday, therefore offering better value for money. Howell argues that while a purchase may provide a brief thrill, we soon take that object for granted, while experiences provide more enduring value.
In an article published on the San Francisco State University website, Howell was quoted as saying: “What [people] really underestimate is how much monetary value they will get out of a life experience. Even though they're told experiences will make them happier and they know experiences will make them happier, they still perceive material items as being better value. We naturally associate economic value with stuff: ‘I bought this car, it's worth $8 000…’ and we have a hard time estimating the economic value we would place on our memories."
The study surveyed individuals both before and after making a purchase. Before making the purchase, respondents said they believed a life experience would make them happier, but that a material item would be a better use of their money. After the purchase, however, respondents reported that life experiences not only made them happier, but were also better value.
So if you want to get the most out of your money in terms of value and happiness this year, spend it on having fun with people you care about rather than accumulating stuff. Create memories with your family and friends that will last a lifetime.
Share this article:
Linked In | Facebook | Twitter | Email
|
