Why you should spend money on experiences, not things

It’s easy for us to get wrapped up in the material aspect of gift-giving—the latest gadget, a fancy watch, that brand-new, 50-inch TV that will look great in the living room. But as birthdays and holidays come and go, I encourage you to think about what you’re spending money on, and what it’s really all about. Is it a thing, or an experience? Which do you think would make the recipient happier?

Studies have shown that people are happier when they spend their money on experiences rather than things. According to Dr. Thomas Gilovich, a psychology professor at Cornell University, “Our experiences are a bigger part of ourselves than our material goods.” He says that while we can like our belongings, experiences are what shape us to be the person we are. They become the stories we tell to other people and the memories we hold on to. In turn, these experiences make us happier than a physical item we can purchase.

A Forbes article echoes the sentiment, focusing on the work of two researchers who have explored the effect of money on our happiness. “One of the most common things people do with their money is get stuff,” says Michael Norton, an associate professor of marketing at Harvard Business School and co-author of Happy Money: The Science of Smarter Spending, “But research shows that stuff isn’t good for you. It doesn’t make you unhappy, but it doesn’t make you happy. But one thing that does make us happy is an experience.”

One of my favorite sayings is, “Travel is the only thing you buy that makes you richer,” because it sums up the value of investing in travel and the experiences you have while exploring the world. While travel can be an expensive endeavor—it costs money to book flights, stay in hotels, buy food and visit museums—the experiences you have while doing these things are often life-changing moments that alter your view of the world. Traveling changes your perspective, introduces you to new cultures, helps you build new relationships and creates positive memories that you’ll have forever.

When you compare that to what a pair of jeans can do for you, it seems like an obvious choice, doesn’t it?

Do you believe in spending money on experiences (like traveling the world) rather than things? Share your opinion on Facebook!