Want to buy happiness? Then spend your money on an experience, like concert tickets or a trip to the U.S. Open, instead of buying new clothes or a big-screen TV.
New research from Cornell University finds that using your money to do something makes you happier than purchasing material goods. In fact, just thinking about making vacation plans or going to the symphony raises your level of happiness more than anticipating a purchase like furniture or a computer.
What if you have to stand in a long line to make a purchase? Well, you’re likely to be in a better mood if you’re buying ski passes rather than shoes or cologne, perhaps because there’s more anticipation associated with the event, according to the study.
Amit Kumar, one of the study’s lead authors, says that buying experiences instead of merchandise makes us happier because experiences are typically shared with people and foster social interaction. Moreover, buying an event lives on in our minds and in the stories we continue to tell about it over the years. The pleasure we get from a new couch is fleeting.
“Experiences have psychological staying power,” Kumar said in an interview. “People talk about their experiences more than their purchases. That’s how they continue to derive pleasure from their experience even though, say, a concert only lasted two hours.”
The Cornell researchers affirmed what other studies have shown — that money can buy happiness if it’s spent in certain ways.
Elizabeth Dunn, who with Michael Norton wrote Happy Money: The Science of Smarter Spending, says that giving to others boosts our levels of happiness. For example, if you inherited a windfall, you might think that buying fancy cars and big homes would make you happy. However, spending that money on other people would make you feel happier and more content, Dunn and Norton say.
“A decade of research — conducted by us and our colleagues — demonstrates that our intuitions about how to turn money into happiness are misguided at best and dead wrong at worst. Those televisions, cars and houses? They have almost no impact on our happiness,” the authors said in the Harvard Business Review.
Another important lesson about spending and happiness involved how we pay for things. Dunn and Norton say that paying for a trip to Paris upfront, before your departure, would ultimately allow you to get more pleasure out of it than if you charged the vacation on a credit card and paid for it later.
Also of Interest
- 5 Top Regrets of the Dying
- Retirees Living Comfortably on Less, Survey Shows
- Fight fraud and ID theft with the AARP Fraud Watch Network.
- Join AARP: Savings, resources and news for your well-being
See the AARP home page for deals, savings tips, trivia and more