Spending Money

“When you spend your money, it should be on something that lasts a long time, not something that’s gone in a moment.”
Agree or disagree?


The Enemy of Happiness is Adapatation
“One of the enemies of happiness is adaptation,” says Dr. Thomas Gilovich … “We buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.”

It's counterintuitive that something like a physical object that you can keep for a long time doesn't keep you as happy as long as a once-and-done experience does. Ironically, the fact that a material thing is ever present works against it, making it easier to adapt to. It fades into the background and becomes part of the new normal. But while the happiness from material purchases diminishes over time, experiences become an ingrained part of our identity. “Our experiences are a bigger part of ourselves than our material goods,” says Gilovich. “You can really like your material stuff. You can even think that part of your identity is connected to those things, but nonetheless they remain separate from you. In contrast, your experiences really are part of you. We are the sum total of our experiences.”

One study conducted by Gilovich even showed that if people have an experience they say negatively impacted their happiness, once they have the chance to talk about it, their assessment of that experience goes up. Gilovich attributes this to the fact that something that might have been stressful or scary in the past can become a funny story to tell at a party or be looked back on as an invaluable character-building experience.


Connection
Another reason is that shared experiences connect us more to other people than shared consumption. You're much more likely to feel connected to someone you took a vacation with in Bogotá than someone who also happens to have bought a 4K TV.
“We consume experiences directly with other people,” says Gilovich. “And after they're gone, they're part of the stories that we tell to one another.”


Less Envy
You're also much less prone to negatively compare your own experiences to someone else's than you would with material purchases. One study conducted by researchers Ryan Howell and Graham Hill found that it's easier to feature-compare material goods (how many carats is your ring? how fast is your laptop's CPU?) than experiences. And since it's easier to compare, people do so.
“The tendency of keeping up with the Joneses tends to be more pronounced for material goods than for experiential purchases,” says Gilovich. “It certainly bothers us if we're on a vacation and see people staying in a better hotel or flying first class. But it doesn't produce as much envy as when we're outgunned on material goods.”

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