I wrote this article when I was a newspaper reporter in Colorado. This story laid the groundwork for my early ideas about money, and I’m proud to share it with you today.
The Secret to Happiness
By Paula Pant
Original Publication: The Colorado Daily 6/31/2007
A University of Colorado researcher has discovered the recipe for happiness.
Hike the Grand Canyon. Sing karaoke. Dance the tango. Grill out with friends. And no matter what, don’t skimp on those experiences to save for a bigger apartment or plasma television.
University of Colorado-Boulder psychology professor and happiness expert Leaf Van Boven recently concluded a study in which he found that spending limited money on life experiences instead of material possessions generally makes people happier.
Van Boven polled people from all walks of life about past activities and purchases. He found people’s moods elevated more when they recalled experiences – even if the experience, at the time it happened, wasn’t that great.
In other words, memories get rosier with hindsight. Objects depreciate.
“The compelling reason people invest in material possessions is you get to retain it over time,” Van Boven said. But in truth, experience is “really quite enduring and improving.”
This is partly because people tend to recall sunnier parts of a trip — the roller-coaster rides, the dolphins in the ocean — while forgetting about the long car ride and cranky kids, he said. It’s also because people are less likely to engage in an experiential arms-race with their neighbors.
Only one person in the neighborhood can have the biggest house or nicest car, Van Boven said, but someone else’s trip to Costa Rica doesn’t cheapen one’s own trip to the Rockies. “Experiences tend to be less prone to those kinds of ‘keeping up with the Joneses’ effect,” he said.
Even the changing definition of “basic needs” is influenced by what others have. “Things like air conditioners people nowadays say they absolutely need,” Van Boven said. “Seventy-five years ago nobody would have said that.”
That’s where experiences come into play. A luxury Caribbean cruise isn’t more happiness-inducing than dinner and a movie with friends, Van Boven found. What counts most are memories that emerge from the experience – which tend to be increasingly cherished over time.
Of course, the dichotomy of experience versus objects “is kind of a fuzzy one,” Van Boven said. People need possessions – like a bicycle, skis or a car – to have experiences. The trick is to buy tools as a means to an end, he said.
Ask yourself, “To what extent does your purchase allow you to do new things?” Van Boven said. “If you already have a car that runs reasonably well, getting a newer and better car probably won’t expand your experiential profile.”
The exception to this rule is seen in the poorest of the poor, he found. “Those people at the very lowest levels of income were least likely to say that experiences made them happier than material possessions,” he said.
He ventures two hypotheses to explain this. First, deciding how to spend discretionary income is itself a luxury. Second, “a lot of the experiences people pursue have some kind of educational experience to them.”
A visit to an art museum, a play, a comedy club, a baseball game and a personal quest to climb all of Colorado’s highest peaks share one common thread, he said – “you have to know how to enjoy them.”