I recently discovered a new podcast, You Are Not So Smart, and really enjoyed an episode called Happy Money, focused on money and rewards. Shortly after that I read this article from Scientific American. The takeaway from both is simple: Buying experiences makes us happier than buying things.
Turns out a fair bit of research has been done regarding people’s perceptions of how much they’ll enjoy a thing before and after they buy something. We think we like buying things better because they give us more value, but we get more joy out of experiences. The reason is that we can place an objective value on a thing. “This bottle of Cantillon cost me $25 in 2013. I could probably sell it for $75 to $100 now.” Whereas memories and experiences have a much more subjective value to them. “I had an amazing time at that bottle share last month.” What is an “amazing time?” How much is it worth? Despite this, we pull more happiness out of the experience than the possession of material goods.
The study showed that this effect of enjoying experiences more than things increases with delayed satisfaction. That is when we buy a thing and pay for it now with the plan of experiencing it later we will enjoy it even more than if we bought it and enjoyed it immediately.