Let’s say you have extra money to spend at the end of a year of hard work. Would you rather use the money to purchase a brand new flat screen or tickets to a vacation in Maui? They both cost the same, but could one make you happier?
The essential difference between these two choices is that the flat screen represents a material good while the trip to Maui represents an experiential good. Studies on how people view choices involving material goods and experiential goods have shown that people find it harder to make choices for material goods than the experiential ones. Additionally, people reported that over time, they were less satisfied with choices they made involving material goods. However, in the long run, they were more satisfied with their choices of experiential products. Psychologists Travis Carter and Tom Gilovich believe this may be because material goods are easier for us to compare and that experiences become a psychological part of us while material goods are simply possessions with little mental significance.
While in theory it seems that people should be investing their money in experiences if they want to be happy, in practice people are purchasing material goods over experiential goods. Many people think it is more economically valuable since after all, a material thing generally lasts longer than an experience. Thus, when making purchases, people have to balance between emotional values and financial values.
In tackling the old adage that says money can’t buy happiness, it seems that some may be able to argue that it can, depending on where you spend it. Authors Elizabeth Dunn and Michael Norton explain that in a sense, we can buy happiness with five key principles: 1) buy experiences, 2) make it a treat, 3) buy time, 4) pay now, consume later and 5) invest in others.
Other scientists argue that happiness, as it relates to our purchases, is a matter of expressing our identities. Some claim that for true contentment, your purchases must also align with your personality and values. So if you’re a theatre fan, you may be much happier buying DVDs of your favorite plays than getting tickets to a baseball game, which although it is a life experience, does not accord with your personality.
So, back to our original question. Flat screen or trip to Maui? Sure, a flat screen may make you happy for a short while, but memories of snorkeling or hiking from your Maui trip can last much longer and you’ll probably learn and grow from the experiences, whether good or bad. Also, consider your personality and what you value. Do you prefer staying at home or travel? Things come and go, but memories can last a lifetime, and much like an experience that you enjoy, happiness is essentially priceless.