“Our experiences are a bigger part of ourselves than our material goods.”
That nugget of wisdom comes from Dr. Thomas Gilovich, a psychology professor at Cornell University (as reported in Fast Company). Dr. Gilovich has spent more than 20 years examining money and happiness.
You’ve probably heard that “money can’t buy happiness.” It turns out that money can buy happiness, but only to a point. Dr. Gilovich studies the Easterlin paradox. This phenomenon states that purchasing things does make us happy, but the happiness wears off. We adapt quickly, growing accustomed to the thing. Therefore, the perceived value of the money we spent declines.
Experiences, however, have the opposite effect. When we spend money on experiences, Gilovich and other researchers who study this paradox find that our satisfaction with the experience (and, thus, the money we spent on that experience) increases over time.
This might seem counterintuitive: If you buy a thing, you get to keep it. An experience is fleeting. Shouldn’t the thing produce longer-lasting happiness?
Nope. Not even a little bit.
Shared experiences are even more valuable, according to Dr. Gilovich. “We consume experiences directly with other people,” he says. “And after they’re gone, they’re part of the stories that we tell to one another.”
Are you thinking you need to book a world cruise in order to take advantage of the Easterlin paradox? Hardly. As reported in Forbes based on another study from San Francisco State University, the accumulation of smaller experiences are what really matters, and even small moments trump purchases: “Enjoyable evenings out in the company of loved ones will provide a much longer lasting and more fulfilling happiness than the temporary thrill of a large purchase,” writes author Ilya Pozin in the Forbes article.
Conclusion: Invest in experiences. Invest in memories. Make the dinner reservation. Throw the party. Plan the quick weekend getaway. Your happiness just might depend on it.