Originally published 2016-01-20.
For most people, spending money on experiences, such as trips, concerts, classes or time outdoors with friends, brings more lasting happiness than spending the same money on possessions. That is the central finding of research led by psychologists Leaf Van Boven and Thomas Gilovich, and it has held up in many later studies. There is an important catch, though: the advantage is strongest when your basic needs are already covered, and a useful purchase can be just as satisfying as a trip when money is tight.
This guide explains why experiences tend to stay with us, where that rule of thumb breaks down, and how to use the idea in everyday spending without assuming you need an expensive holiday to be happy.
What the research says
In a 2003 paper in the Journal of Personality and Social Psychology, Van Boven (then at the University of Colorado Boulder) and Gilovich (Cornell University) asked people to recall two purchases made to increase their happiness: one "experiential" and one "material". In a national survey of more than 12,000 Americans, carried out by Harris Interactive, most said the experience had made them happier. Laboratory studies with students pointed the same way: simply thinking about a past experience lifted people's mood more than thinking about an object they had bought.
Many studies since then have reported a similar "experiential advantage". The effect is not magic, and it is not universal, but it is consistent enough to be useful when you are deciding where your spare money should go.
Why experiences tend to last longer
The researchers suggested three reasons, and each one matches what many of us notice in our own lives.
1. Memories improve with time
A holiday with a missed train and a soaked tent can become, a few years later, the story everyone laughs about. We tend to reinterpret experiences in a positive light. A new phone, by contrast, does not get better in memory; it simply gets older, slower and replaced.
2. Experiences become part of who we are
Climbing a mountain, learning to cook a regional dish or spending a summer volunteering shapes our sense of self. People are more likely to describe themselves through what they have done than through what they own. That link to identity makes the satisfaction more durable.
3. Experiences connect us to other people
Most memorable experiences are shared, and even solo trips give us stories to tell. Talking about a journey invites conversation, while talking about an expensive purchase can come across as showing off. Since close relationships are among the strongest predictors of wellbeing, anything that brings us closer to others tends to pay off.
There is also a simpler effect: we compare possessions more. Someone always has a newer model or a bigger screen. Experiences are harder to rank, so they are less prone to the envy and regret that follow comparison.
The catch: money and circumstances matter
A 2018 study in Psychological Science by Jacob C. Lee, Deborah Hall and Wendy Wood added an important nuance. Across several studies, people with higher incomes and more education showed the experiential advantage clearly. People with fewer financial resources did not: they reported similar happiness from both kinds of purchase, and some were happier with material ones. When participants imagined their income falling by half, the advantage of experiences shrank.
The explanation is practical. When money is limited, a good winter coat, a reliable car or a working washing machine solves real problems every day. Material goods can last, can be resold and can save time and stress. So the honest rule is not "experiences always beat things", but "once your needs are met, extra spending on experiences usually brings more joy than extra spending on stuff".
You do not need a big trip: time in nature
The most valuable experiences are often cheap or free. A 2019 study led by Mathew White at the University of Exeter, published in Scientific Reports, looked at almost 20,000 people in England. Those who spent at least 120 minutes a week in natural settings were significantly more likely to report good health and high wellbeing than those who spent no time in nature. It did not matter whether the two hours came in one long walk or several short visits, and many of the places people went were local parks within a couple of miles of home.
The study shows an association rather than proof of cause, but it fits with a simple habit: if you want more good experiences, start with the park, river path or woodland nearest you. Leave the phone in your pocket, notice the light, the birds and the weather, and let your mind wander.
Practical ways to spend for happiness
- Look ahead. Part of the pleasure of a trip comes from anticipating it. Booking something small a few weeks out gives you something to look forward to.
- Buy things that enable experiences. A bicycle, a tent, hiking boots or a musical instrument blur the line between "thing" and "experience". If an object gets you out of the house or into new skills, it often delivers the same benefits.
- Share it. Invite a friend, plan a day out with family, or join a club. Shared experiences tend to give the biggest lift.
- Save with a purpose. A clear goal, such as a weekend away or a course, makes it easier to skip impulse buys. A dedicated savings pot helps.
- Keep a financial buffer. Peace of mind is an experience too. Covering bills and keeping some emergency savings matters more for wellbeing than any single treat.
- Notice the hedonic treadmill. The thrill of a new gadget fades quickly as we adapt to it. Before buying, ask whether you will still care in three months.
Common myths about money and happiness
- "Money cannot buy happiness." Money that removes hardship clearly improves wellbeing. How you spend discretionary money also matters, which is the point of this research.
- "Only travel counts as an experience." Meals with friends, concerts, classes, volunteering and a walk in the park all qualify.
- "Possessions are always shallow." Tools, books and instruments can be the doorway to years of rich experiences.
- "More expensive means more memorable." The stories we tell most often are rarely about how much something cost.
Experiences as markers of a life
When people look back on their lives, they tend to measure them in moments: the first trip abroad, a long conversation by a fire, the day they learned something hard. Those moments remind us that we are all, in a sense, travellers, meeting others who are looking for meaning too. Spending a little more of your time and money on them, and a little less on the latest device, is one of the more reliable ways to make life feel full.
Sources: University of Colorado Boulder on Van Boven and Gilovich (2003); Association for Psychological Science on Lee, Hall and Wood (2018); ScienceDaily on White et al. (2019).
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