“To be happy, buy experiences, not things.” 

It’s a simple slogan. And it certainly seems compelling. I’ve seen it repeated many times in recent years, and I’ve been guilty of saying it as well.

The book Happy Money by Elizabeth Dunn and Michael Norton makes a strong case for this philosophy.

The more I think about it, however, the more I question its wisdom.

Do experiences always trump things?

Surely not.

Buying basic food might not make you happy.

But if you spend all of your income on movie tickets, you’ll pretty quickly find that going without the basics can make you very unhappy.

“Buy experiences.” What experiences?

Experiences aren’t equal in terms of making us happy.

A day at the Louvre will always be better than an hour in a dental chair, no matter how charming and competent your dentist is. (Or your orthodontist. That’s a shameless plug for my wife by the way.)

In Happy Money, Dunn and Norton explain that “you’re likely to get the biggest bang for your buck if:

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  • The experience brings you together with other people, fostering a sense of social connection.
  • The experience makes a memorable story that you’ll enjoy retelling for years to come.
  • The experience is tightly linked to your sense of who you are or want to be.
  • The experience provides a unique opportunity, eluding easy comparison with other available options.”

Interestingly, “the length of an experience has little impact on the pleasure people remember deriving from it”. Dunn and Norton suggest, for example, that a short holiday tends to generate a similar level of happiness as a long holiday.

Is the distinction really between experiences and things

Can you buy things that meet the criteria above? Or at the very least optimise the way you buy things so that they get the benefits of being experiential?

In Happy Money Dunn and Norton explain that “shifting your focus can alter whether a purchase feels like an experience”. For example:

“Imagine buying a boxed set of music by your favourite band. Think about where you would put it in your house and how it would fit with the rest of your collection. Now forget that, and consider instead how you would feel while listening to these songs, focusing on your connection with the music. Research shows that people are more likely to see the boxed set of music as an experiential purchase when they follow the second set of instructions.”

Where does it end?

Clearly things can give you experiences. My iPhone and iPad have given me tremendous value – and I’d characterise this as adding to the experience of my life. I have a better experience of life when I wear nicer clothes. These are things, but they seem to make me happy.

When (or if) I buy a Porsche Cayman, I won’t just be buying a “thing”. I’ll be buying an experience associated with owning the Cayman. It’ll connect to my identity, in the sense that it will fill the Porsche-Cayman-hole-in-my-soul. My desire for a second-hand Porsche Cayman also reflects how I prioritise certain values (a Porsche rather than another marque; a Cayman rather than a 911; a $30,000 sports car rather than a $300,000 sports car; etc).

Like many purchases of “things”, it’ll form a part of the story of my life.

The false dichotomy of “things vs experiences”

To my mind, “things vs experiences” also creates a false dichotomy. It assumes that if you’ve got money, your only choice is how to spend it.

When in fact, there’s another option. You don’t need to spend it at all. You can put it towards building wealth (or repaying debt, which is ultimately the same thing).

For many people, having money saved and available can lead to a greater degree of happiness than spending the money in the first place.

For a great number of people, being a step closer to financial independence, or having some money for a rainy day, or being a step closer to being debt-free and being able to sleep more soundly at night, is nothing to be sneezed at.

Where we sit on the things-versus-experiences spectrum depends on our individual differences

Everyone is different. We have different interests and values.

At a basic psychological level, we all sit on different places on the spectrum in relation to the “big five” personality traits – extroversion/introversion, openness to new experience, conscientiousness, stability/neuroticism, and agreeableness. These traits seem to be relatively stable over time and between circumstances.

I believe there are large differences about the relative level of happiness that different people receive from “things” versus “experiences”.

If I compare myself with my wife, for instance, I think I’m a lot more oriented towards “things” than her. I’m not sure whether it relates to our upbringings or the personalities we were born with. But I am more likely to buy things than experiences than her. I’m also more likely to be attached to things. I think I get a lot more satisfaction from owning things than her.

Contrary to gender stereotypes, I’m also more vulnerable to the lure of “retail therapy” than her.

I don’t think I’m wrong. And I don’t think she’s wrong.

But we’re different.

The more I think about it, the exhortation to “buy things, not experiences” isn’t quite right.

The most important thing of all is to spend money mindfully. And to focus on the characteristics of spending that support the general theory that experiences trump things.

Like their ability to bring you together with people and cultivate important relationships. Or the ability of these purchases to form a positive part of your identity, and the broader story of your life.

Sonnie Bailey

In his spare time, Sonnie likes telling people that he’s a former Olympic power walker, a lion tamer, or that he is an orthodontist. He is none of those things. In reality, Sonnie is a financial planner based in Christchurch. Through his business, Fairhaven Wealth (www.fairhavenwealth.co.nz), he provides independent, advice-only, fixed-fee financial planning services. Sonnie is a “recovering lawyer”: he has specialised in trusts and personal client work. He has also worked as a financial services lawyer for many years.

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