You’ll never reach the top level in Abraham Maslow’s hierarchy of needs, self-actualization, if you concern yourself with your possessions. If you focus on acquiring gadgets, showering your children with toys, or achieving other materialistic pursuits, if you do so while neglecting the pursuit of including satisfying experiences in your life, you can never reach your full potential.
Even thinking about experiences beyond base needs is a luxury when abiding by Maslow’s theory, because pursuing fulfilling experiences requires discretionary income or available cash. Anyone who hasn’t been able to meet the lower-level requirements in the hierarchy may need to devote all resources to health and safety. For those of us in the developed world who have benefited from a society that allows successful people to do as they choose with their financial surplus, we often face questions about how to spend that money with an eye towards increasing happiness.
As I’ve found myself in a more comfortable financial situation over the last decade — and that comfort comes from an increased income and an ability to save for the future without sacrificing too much of my present — I’ve begun trying to find more ways to use surplus income (after meeting savings goals) to enjoy my life today. Financial writers often get caught up with the idea that people need to save as much money as possible for the future, but once there is some comfort with planning, there has to be an opportunity to enjoy life today.
Once my finances were on a solid path, I decided I was comfortable increasing today’s expenses. The gateway for me was most likely moving into a new apartment. If my only income came from my day job, I might not have been able to comfortably move from a small apartment to a nicer, larger apartment without making sacrifices somewhere else. By moving into the newer apartment, I recognized that my income stream outside of my day job would be fairly steady, and that I had an emergency fund for back-up in the event of a disaster. I also accumulated things. With my day job, I was able to afford cable again, but with extra income, I was able to justify high-definition service and a new, high-definition television.
I was able to afford to buy cameras, lenses, and other photography equipment (several of which I still purchased used to save money), and to explore this hobby further. This gets into the topic at hand: experiences vs. things. While photography equipment consists of things, they are items that allow me to explore a hobby — or possibly a future business — and create experiences for myself. I attended classes at the local arts council to further develop my skills.
A study from 2003 building on prior research about materialism explains that using money to acquire experiences increases long-term happiness than using money to acquire objects. Here are some of the results:
As anticipated, respondents asked to evaluate an experiential purchase indicated that it made them happier than did those asked to evaluate a material purchase. Respondents also indicated that experiential purchases were better financial investments than material purchases. Participants indicated that, compared with material purchases, experiential purchases made them happier, contributed more to their happiness in life, and represented money better spent. Respondents were also less inclined to say that the money spent on experiences could have been better spent elsewhere than the money spent on material possessions.
The authors of the 2003 study also offer suggestions for the causes of these results. Why do experiential purchases result in happiness more than material purchases?
- Experiences are more open to positive reinterpretation. As time passes, view of history becomes rosier.
- Experiences are more central to one’s identity. We are the sum of our experiences; people rarely identify with the items they’ve collected around their house as much as they identify with experiences like travel, operating their own business, and spending time with family.
- Experiences have greater social value. People like sharing and talking about their experiences, and this type of discussion fosters better relationships than talking about possessions.
A follow-up study in 2010 goes further to explain why experiences are more satisfying. This study found that it was easy to compare a purchased item, such as a high-definition television, with other similar items at the time of purchase and looking back. When comparing experiences, such as a family trip to Disney World, it’s much more difficult to make effective comparisons. Also, consumers are more likely to try to get the best deal when shopping for items with a strong field of comparable items but are more likely to satisfice when deciding to purchase an experience. Among other reasons, the researchers also determined that consumers are more likely to compare their material purchases with others’ purchases while have a difficult time doing the same for experiential purchases.
You may be looking forward to the holidays, wondering what type of gifts would make your family and friends happiest. You can always play to the utilitarian point of view by purchasing gifts that the recipient might need, but to have the greatest impact, consider finding a way to offer an experience that everyone would enjoy. The benefits might not be immediate, but an experience could create memories that outshine this year’s hot Christmas toy or latest Apple product for years to come.
Some experiential holiday gifts come to mind.
- A weekend getaway. Spend the weekend in a nearby city to save on transportation costs, and explore the town. This is something I did this past weekend in Philadelphia. It wasn’t a gift, but I am sure my girlfriend and I are going to remember our scary experience at the Eastern State Penitentiary for the rest of our lives.
- Dinner and a Broadway show. Good food and entertainment combine to make lasting memories that enhance happiness. For those who attend Broadway shows more than once a year, find a way to make it more memorable, perhaps with a backstage tour, VIP seating, or meeting the cast.
- Long-distance travel. It’s often less expensive to travel outside of the country than to travel across. Within the United States, there are almost endless opportunities for unique travel experiences as well. I will always remember the time I spent exploring Death Valley with my family.
- An exciting activity. My girlfriend seems interested in skydiving and hot-air-ballooning. I’m not a big fan of either of these activities because I would like to live for a long time, but I know these are activities that would make her happy if she were to live to tell me about them.
Consider leaving behind the material this holiday season and increasing someone’s long-term happiness by engaging in an activity or experience the memory of which will last a lifetime and become more favorable as time passes.