I am a fan of research into what makes life happy, meaningful and filled with well being. This is sometimes called hedonics or even “happiness research”. It is related to the branches of psychology that interest us most: behavioral psychology and behavioral economics. How people relate to money is a complicated and tricky subject, and science has learned a lot in recent years.
We share a lot of articles via social media. I really enjoyed the article “The Science of Why You Should Spend Your Money on Experiences, Not Things”, and wanted to share some thoughts.
We are in the lucky position of working with clients in many stages of life: younger folks who are accumulating savings, families juggling careers, college and life expenses alongside retirement planning, as well as folks enjoying life after successful careers. Everyone has a unique approach to juggling the tradeoffs between current consumption – spending money now – and the delayed gratification of a secure, comfortable retirement or achieving one’s financial goals.
How we spend our dollars both today and when it is time to enjoy retirement, is worth considering. Fortunately, science seems to point to spending on experiences rather than things.
The problem is this notion of ‘hedonic adaptation’, at least in part. A thing, because it exists in our lives and is not fleeting, will become routine or mundane just by its very continuing existence. Alternatively, because an experience is fleeting and thus has to be recalled, carried around, that memory can be manipulated and recalled fondly. Perhaps a bad travel experience becomes a great dinner table tale you spin. I’ve never killed myself laughing at a great story about someone’s watch, have you?
When I was 15 I was deeply moved by a quote that follows me to this day, from Thoreau, and it is “People don’t change, things change. Sell your clothes and keep your thoughts”. 25+ years may have altered that, but I have found ample evidence on a regular basis that trading “clothes” (things) for “thoughts” (experiences) has generally paid handsome dividends.
There are many fun nuggets to glean from recent research on happiness, and I encourage you to seek them out. Whether you are choosing a camping trip over upgrading your car to help with saving today for retirement, travel or volunteering to add meaning and connection to life after full-time work, find your path to happiness.
In the meantime, if you need some help navigating the asset management and financial planning journey, you know where to find us.
Here are some other fun tidbits on this topic:
Happy – The Movie