Happy Friday – Happy Money: Buy Experiences


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.

  1. Buy Experiences
  2. Make It A Treat
  3. Buy Time
  4. Pay Now, Consume Later
  5. 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?

 

Mr PoP

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…

 

Mrs PoP

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”?  

40 comments to Happy Friday – Happy Money: Buy Experiences

  • We spent years buying “things” and have finally learned that “experiences” are SO much more fun! We’re at the place now, as we work diligently to get out of debt, that we have a hard time spending money on new clothes, but we’ll gladly fork over some cash to spend an afternoon at the apple orchard with the kiddos. :-)
    Laurie @thefrugalfarmer recently posted..How Skepticism Can Help You Conquer Your DebtMy Profile

  • I can completely relate to you on running races! We usually stick to shorter distances (one day I might work up to a marathon!), but the premise is the same.. the experience of running and competing with a crowd of other people is well worth the $25-$30 entry fee per person, and I’d much rather spend my money getting to engage in that experience than on more stuff.

    Looking forward to reading the rest of your posts on this book! Sounds like it would be an interesting read, might have to grab my own copy :)
    Kali @CommonSenseMillennial recently posted..How to Have a Fun, Fabulous, and Frugal WeddingMy Profile

  • I like Mr. Pop’s point about “stuff” providing happiness if it’s something you enjoy using over and over again in your daily life. If it’s something you don’t use often or will simply want to replace soon, then it’s not likely to provide much real happiness. But if it’s something you can use regularly over a long period of time, that can definitely fall into the “experience” category.
    Matt Becker recently posted..Building a Secure Financial Base for Your FamilyMy Profile

  • Completely agree with you and Laurie in the comments. Life isn’t about “stuff”. Its about people and experience and our spending patterns should reflect this.
    moneystepper.com recently posted..Free competitions – how much can you earn – part IIMy Profile

  • Debbie M

    I definitely agree with the notion that the things that aren’t easy to replicate are the ones that stick with you, which I suppose is handy when you are old and can no longer do anything but reminisce. They are fun to remember and give you something to talk about. I remember certain grad school party activities fondly (hallway sock football, playing tinikling with Jim’s legs as the poles, doing a flip off the couch onto big pillows). Obviously my trips to foreign countries stick with me. Certain books, movies, songs, TV shows, and video games have made a big impact.

    On the other hand, most of my money is spent on housing and health, which don’t fit the description at all, yet that’s how I like it. I do like having a low-stress pleasant backdrop to my life. It lets me have the energy to take risks and handle stress in other areas.

    Also, many of the things I enjoy are, at least for now, quite easily replicable such as drinking hot chocolate (and many other food experiences), cuddling and backrubs, finally peeing when I’ve been holding it a really long time, and wearing a warm hat. And in fact, one of the things I do to stay happy is to try to make sure that some of these things stay replicable and/or make it so they can be better replicated (such as more cheaply, more conveniently, more sustainably). For example, now I have my own hot chocolate recipe and do not have to rely on having access to Godiva’s mix and rely on them never ruining their recipe, plus I can use shade-grown cocoa and less-processed sugar (add 2 T sugar and 2 T cocoa to 8 oz milk and heat over stove).

    To actually answer your question, I’d say that although I do not try to find unique experiences, I do at least make sure to take advantage of them when they arise. So I visited my sister when she moved to Belgium, I visited a friend when she did a postdoc in Switzerland, I went on the family vacation to Disney World, and I helped make a friend’s idea for us to hike down the Grand Canyon really happen. And for rare, expensive things, I’d generally rather do something new than do my same old favorite thing over and over–so I don’t want to go to Disney World or take this awesome music cruise every single year, though repeat visits (especially when introducing them to someone who’s never been) are fun. On the other hand, I have turned down awesome-sounding experiences that sound too scary for me (ziplines, climbing Mt. Kilamanjaro), though I do worry that I shouldn’t be such a whimp.

    • Hahah! I love you comment…but what the heck is sock football?
      Mr. Pop recently posted..Happy Friday – Happy Money: Buy ExperiencesMy Profile

      • Debbie M

        I don’t exactly remember. But you have two teams, one at each end of the hall. One team has the football and their goal is to touch the opposite wall with it (and there’s no throwing in the house of course). The other team’s goal is to keep them from doing so. There are like six people per team and they are all pushing into each other, but all wearing socks in a wooden hallway, so you wouldn’t have good traction and would be sliding around. And of course this a co-ed game in the days before everyone was coupled up, so that made it extra fun.

  • I used to be one of those people that thought that people who paid to run were…stupid. Until I paid about $80 to sign up for a half marathon. I LOVED that race. It was such an accomplishment and definitely an experience.

    I’m also a huge advocate of vacations, because I love the experience and the memories it creates. I Loved our trip to Costa Rica because it was the perfect mix of adventure–river rafting, waterfall repelling, hiking–and relaxation with spa and beach trips.

    Sounds like the authors got the first part right!

  • I love this topic and I’m glad you guys are making a series out of it. I read The Myths of Happiness a while back and spending on experiences was one of the author’s findings as well. Experiences have the benefit of getting better over time via memories, too, while stuff has diminishing returns. It gets crappier in our perception (and reality) over time.
    Done by Forty recently posted..Do Credit Cards Actually Increase Spending?My Profile

  • Happy Money Kittens has my vote! While I am not a runner, I can completely see how running a race with others is different than running alone. I don’t like to buy too many possessions either, so I am all for buying experiences or things that I will get a lot of use out of. This mostly revolves around travel or bigger-ticket items such as electronics. I would love to travel to so many places, as I think experiencing other cultures can be invaluable.
    E.M. recently posted..Thoughts On Having ChildrenMy Profile

  • I definitely agree with this! Experiences are much more valuable to me than any material possession. I love to travel and have so many great memories from my past trips. I would much rather book a ticket to a foreign country than buy new furniture. I find that when I am considering large purchases I tend to compare the cost to how many days of traveling it equates to. It definitely puts things into perspective! I look forward to the remaining posts in this series.

  • I completely agree with you about the experience of running an organized race. Being surrounded by a couple thousand other people running is just an awesome thing to go through. That combined with hearing a cheering crowd just can’t be replicated by a simple run on a trail. Of course, the “free” swag is also kind of cool.
    Micro recently posted..Do you think that location has an affect on political ideology?My Profile

  • Even just a few years ago I was totally focused on accumulating “stuff”. These days experiences are much more important to me. My favorite experience last year was flying my grandparents to NYC for Christmas. They’d never seen our condo, and my grandmother had never been on a plane, so it was a lot of fun for all of us to spend that time together. Something I’ll never forget. Well worth the money for the experience.
    KK @ Student Debt Survivor recently posted..The Best Things in Life are…Vera Bradley?My Profile

  • This makes me feel a bit better about just spending a good chunk of change on a plane ticket to see old friends. Thanks!
    Mr. Pop recently posted..Happy Friday – Happy Money: Buy ExperiencesMy Profile

  • This is one of those lessons I try to implement with my kids, as much as possible. We constantly talk about and appreciate the experiences we share.

    I’d like to point out, too, that the phrase “money can’t buy happiness” is probably better translated as “money can’t buy joy” in today’s terminology. It can certain buy some form of short-term happiness, but long term there’s no way.
    FI Pilgrim recently posted..Get More Done: A Few Favorite Productivity MethodsMy Profile

  • When I purchased my laptop that was a bit expensive I blamed myself for buying this one. But now I have been using my laptop for my work. I don’t usually buy things unless it’s very, very important.
    Clarrise @ Make Money Your Way recently posted..How to save time managing your ad dealsMy Profile

  • We are focusing on buying experiences right now. Already have a bucket list of places we want to see during our 20s. It’s so important!
    SavvyFinancialLatina recently posted..How to Be SuccessfulMy Profile

  • I really like the idea of this series!

    I am more into buying experiences and my husband is more into buying stuff (chiefly electronics) that translates into having nice day-to-day experiences, which would maybe fall more under the “treat” or “buying time” categories.

  • I’m excited to hear more about this book – I should probably read it myself! :) Travel is one of my favorite experiences to purchase, because I love exploring new places and seeing cool sights, but also because it loosens up my spending. At home, I’d never pay $15 to mini golf, but on vacation? Sure! And then I end up having so much fun and wondering why I don’t play more often, haha 😉
    Amanda recently posted..How the Average American Spends their PaycheckMy Profile

  • I could try to learn a new hobby on my own via youtube videos but it’s just no the same as taking a class for a fee. I took a sewing class to try to learn to sew and while I can do the basics, I would really like to go for more. I think I like the experience of being in an advanced sewing class vs trying to learn on my own.
    Tara @ Streets Ahead Living recently posted..Getting up and dusting yourself offMy Profile

  • I just got that book out of the library randomly, now I’m excited to read it! I’ve recently tried to really live the “buy experiences not stuff” mantra recently and it’s been great! As you know, I’m pretty frugal in all my purchases, but anytime someone asks me to see a band, film festival, zoo, Chicago Ideas week, or any other experiential activity, I’ve been going regardless of cost and it’s been a blast.
    My coworker questions my decision to purchase a phone that was only $100 cheaper than the fanciest phone out there. I responded to him that $100 can buy a ton of incredible experiences :)
    Cash Rebel recently posted..You’re poor because you made bad decisionsMy Profile

  • admin

    Ha! I think Mrs. PoP got a lot out of it, very glad to hear that you’re having success buying experiences!

  • I agree about experiences but sometimes when you buy something, you buy an experience several times over. An example would be when we bought our kayaks. Now that we have them, we cab go anytime we want to.
    ND Chic recently posted..Oh No, Murphy!!!My Profile

  • I totally agree on the running thing. I always tell people that running a 5k just on your own is a completely different experience than running a 5k race. Just the energy is completely different. After fincon I’m really inspired to train for a 1/2 marathon…just a matter of when and where. And I think experiences are all perceived differently too. What seems like a no-brainer to some is a big deal to others. I’ve really tried to be present about any “stuff” I’m buying and ask myself if I really need it because there are so many experiences I could be saving up for.
    Budget and the Beach recently posted..Surround Yourself with Financially Positive PeopleMy Profile