The first principle in Happy Money is to BUY EXPERIENCES, not buying stuff.
The authors, Elizabeth Dunn and Michael Norton, suggest making experiential purchase instead of making material purchase. Experiential purchase includes leisure like trips, movies, sporting events, gym memberships, and the like. People who spend more of their money on leisure report significantly greater satisfaction with their lives.
We don’t wish to deny that material things can provide immediate delight. But this material rush will likely fade, whereas the experiential high lasts much longer.
Happy Money, Elizabeth Dunn and Michael Norton
There are plenty of experiences that money can buy but the authors suggest that these types of experiences bring the most happiness:
- Experiences that brings you together with other people fostering a sense of social connection.
- Experiences that makes a memorable story that you won’t get tired of retelling for many, many years to come.
- Experiences that are tightly linked to your sense of who you are or who you want to be.
- Experiences that provides a unique opportunity and that cannot be easily compared with other available options.
This is probably why I love running. Despite the pain, the cost, and the availability of shorter distances, I always enjoy the experience of running a marathon or even just the half of it. I am sure many runners will agree with me.
Studies show that even when people spend only a few dollars, they get more lasting pleasure from buying experiences such as playing a video game or listening to a new song than from buying material thing like a key chain or picture frame.
Happy Money, Elizabeth Dunn and Michael Norton
Experiential purchases can be very abstract. It’s hard to put an exact value on what you have experienced. This is what I think adds to the appeal of an experiential purchase. I can be just as happy running either 21K or a 42K.
The authors mentioned a study in New Zealand where vacationers rated their happiness after their trip. “Although the vacations ranged in length from four to fourteen days, the duration of the trip had no bearing on their overall feelings about the trip.” They felt happier during and after the trip. This is true even if there are unpleasant things that happened during the trip.
The problem with material things
Material things don’t necessary improve overall happiness. For example, the authors mentioned a study of homeowners and “there is almost no evidence that buying a home – or a newer, nicer home – increases happiness.” You may be satisfied by the newness of the purchase, but overall happiness doesn’t improve as much. You could be just as happy with the previous one.
Material things losses their appeal when better things are available. You would be happy to own the latest mobile phone today. But a year or two from now, you won’t be as happy. You would wish for the next latest model instead. And this cycle goes on. “We are happy with things, until we find out there are better things available.”
Looking back on their past decisions about whether to purchase experiences, 83 percent of people reported that their biggest single regret is one of inaction, of passing up the chance to buy an experience when the opportunity came along. The opposite was true for material goods; most people’s biggest regret was buying something that they wish they hadn’t.
Happy Money, Elizabeth Dunn and Michael Norton
In Part 3, we will discover the next 2 principles from Happy Money.
Happy Money Book Summary
Part 1 | Part 2 | Part 3 | Part 4 | Part 5
