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[This post is an excerpt from the new Pearson textbook, Motivation Science. Instructors can click here to order their free review copy.]
Most of us know that money doesn’t automatically bring you happiness—but why? Perhaps it’s because we’re spending it on the wrong stuff. Stuff to fill our houses, stuff to put in our garages, stuff to drape around our necks or sparkle on our fingers. But despite what we think, all this stuff doesn’t make us happier.
Why is that?
Well, one reason possessions don’t make us as happy as we think they will (or for as long as we think they will) is because of an effect called “experience-stretching.” According to this principle, the more you experience something pleasurable, the less you come to enjoy it.
Just think back to when you were young and everything you did was a new experience: the first time you tasted chocolate, the first time you slept in a tent under a starry sky, your first kiss. These mundane experiences fill us with joy the first time they occur, but you probably wouldn’t be nearly as excited now if you ate chocolate or had to sleep in a tent. The more we experience something over and over, the more we become habituated to it and no longer feel the pleasure we once did. Because having lots of money allows us to experience the finest things in life—the most luxurious soaps from Paris, the freshest sushi from Tokyo—wealth decreases our ability to savor the little joys in life like a starry night or a loving kiss.
But here’s the good news: There are ways you can spend that will practically guarantee a large and long-lasting boost in happiness. The key is to use your money to invest in memories, not objects. Research shows that people who spend their money on material possessions are far less happy with their purchase than people who spend their money on experiential purchases. Experiential purchases are those made with the intention of acquiring a life experience rather than a material object.
When you make an experiential purchase, you don’t own it; you live through it. Examples include taking a trip, going skiing on a mountain, seeing a Broadway play, attending a baseball game, or playing a video game. One study found that when people were asked to reflect on their material and experiential purchases, 57 percent state they derived greater happiness from the experiential purchase, while only 34 percent report greater happiness from the material purchase. Similarly, people who emphasize family and religious experiences during the Christmas holiday are happier than people who emphasize buying and receiving material gifts (Kasser & Sheldon, 2002).
As Ronald Regan put it, “Money can’t buy happiness, but it will get you a better class of memories.” It is that better class of memories that in the long run will make you happy.
Experiences bring us more pleasure than possessions partly because the experience-stretching effect is more likely to happen with possessions. What was once a luxury mansion now just becomes a home. What once was imported Italian tile now just becomes the unnoticed ground beneath your feet. But the memory of your first gondola ride through Venice or of hearing Beethoven’s Moonlight Sonata in a grand theater continues to provide you with pleasure.
To examine experience-stretching in the lab, researchers randomly assigned participants to spend three “lab dollars” on a material purchase (e.g., a deck of cards, picture frame, key chain) or an experiential purchase (e.g., listen to a song, play a video game, watch a video clip). Over the course of two weeks, participants who spent their money on an experience were slower to adapt to their purchase and in the end were happier with their purchase than those who spent their money on an object. So if you want to spend your money wisely, spend it on something you can do rather than something you can have.
Another reason why we enjoy experiences more than possessions is that they are more likely to be shared with others. This means that spending your money on experiences will bring you happiness, but only if those experiences can be shared with others. So as you are rushing around for last-minute gifts this season, consider buying your loved ones a shared experience. Instead of getting them clothes or gift cards, treat them to the ballet, a horseback riding lesson, or the new Star Wars movie. Not only will it give you and your loved ones many happy memories, it will teach your loved ones how to spend money in a way that ensures their lifelong happiness too.
