Recently a book called Happy Money: The Science of Smarter Spending came out, and considering it talks about the relationships between two of the three things we most care about, we just had to give it a read. Heck, the only way we would have picked it up any faster would have been if the title were Happy Money Kittens. (If they do a followup under that title, I want an attribution credit…)
Written by behavioral scientists Elizabeth Dunn and Michael Norton, Happy Money sells itself with the tagline:
“If you think money can’t buy happiness, you’re not spending it right.”
According to their research, there are five basic ways in which money can be spent that increase happiness for the average person.
- Buy Experiences
- Make It A Treat
- Buy Time
- Pay Now, Consume Later
- Invest In Others
Over the next five Fridays, we’ll post a Happy Friday post on each of these topics where we’ll summarize Norton and Dunn’s thoughts on the matter, and Mr PoP and I will talk a bit about how we do (or don’t) incorporate these ideas into our lives.
Part 1 – Buy Experiences
The mantra to “buy experiences” is a pretty common refrain, but Dunn and Norton try and put a scientific spin on it for a change of pace.
“Because the benefits of experiences are often more abstract than the benefits of material goods, it’s easier to appreciate the value of experiential purchases with the psychological distance that time provides.”
But the definition of what makes for an “experience” can depend from person to person. For some, an event or a trip is only an “experience” if it is something that is not easily replicated (say a trip to an ice hotel over on to a beachfront Marriott) even if the experience itself is not necessarily enjoyable in the moment.
This seems counterintuitive, since survey participants (by overwhelming margins) acknowledge that a beachfront vacation would be far more enjoyable to go on than one to an ice hotel. However, for those whom an “experience” is marked by uniqueness and memorability, the lasting memory of the hard-to-recreate visit to the ice hotel will endure and bring enjoyment far longer than a beach vacation they might have enjoyed much more “in the moment”.
And, perhaps in part because they’re trying to defend their desire to sell BOOKS, which are physical objects, Norton and Dunn also assert that depending on the viewpoint of the purchaser, physical objects can be experiential purchases as well. The experience being the act of reading a book in contrast to purchasing a book simply to have it on your bookshelf. Depending how you view the book purchase, your happiness and satisfaction with it will change. (Note – I still advocate the library – have your experience and keep your cash, too!)
Basically, Dunn and Norton are trying to say here is that in general, purchases of material goods, STUFF, end up providing an immediate rush of pleasure that diminishes quickly in contrast to experiences of which we hold the memories quite a bit longer.
So how do we bring this into our lives?
I tend to have few possessions, and really hate to go shopping. But, I will say that when I buy something I have a tendency to spend a good deal of money on it. My last two computers have been expensive and top of the line, my headphones are very expensive, and I spent about $1200 on an espresso set up as well.
Oddly, I could each of those things among my best purchases, probably because I get to experience each of them on a daily basis, take care of them, and expect them to last an incredibly long time. Wonder if I could convince Mrs. PoP that I would enjoy experiencing an NSX on a daily basis as well…
Finally, I have a coherent explanation of why I find organized, official road races so much more fulfilling than just tracking 26.2 miles on my gps and running it out as a singleton. Mr PoP has been an excellent travel companion (and never put up a fuss as to how much I spend) on my running adventures, but I don’t think he ever really believed me when I asserted that running an organized race with a group of other folks feels completely different even if in my mind my primary race opponent is my own previous PR (personal record).
But Norton and Dunn helped me put a nice word on it – experience. It’s not that a $100 entry fee is providing 4 hours of race support, a “free” race shirt, and a few cups of gatorade. It’s that the race fee is providing the experience of a concrete goal with a defined timeline, that I look forward to for months, every time I go out for a training run. And then for months and years afterwards, I continue to remember the course, the people I met on it, the crazy costumes the volunteers (and sometimes other racers) wear along the course and can’t help but smile. And I usually get an awesome medal that I hang in my closet as my hidden shrine, which is more than enough “stuff” for me.
How do you buy experiences? Do you think you’re focusing enough on buying experiences over buying “things”?