Garrett Jones, guest-blogging for Megan McArdle, classifies memorable experience as a "consumer durable," since the satisfaction lasts and lasts. Jones writes:
People often shrink from driving to a distant, promising restaurant, flying to a new country, trying a new sport--it's a hassle, and the experience won't last that long. That's the wrong way to look at it. When you go bungee jumping, you're not buying a brief experience: You're buying a memory, one that might last even longer than a good pair of blue jeans.
Psych research seems to bear this out: People love looking forward to vacations, they don't like the vacation that much while they're on it, and then they love the memories. Most of the joy--the utility in econospeak--happens when you're not having the experience.
... A corollary: if memory really is a durable, then you should buy a lot of it when you're young. That'll give you more years to enjoy your purchase.
So it's worth a bit of suffering to create some good memories, since the future lasts a lot longer than the present.
This is good advice. A number of recent studies bear out the idea that spending on experience is more likely to boost satisfaction with life than spending on stuff. What's so great about experience? Elizabeth Dunn, Daniel Gilbert, and Timothy Wilson's instant-classic study, "If money doesn't make you happy, then you probably aren't spending it right," contains an excellent discussion worth quoting at length:
Experiences are good; but why are they better than things? One reason is that we adapt to things so quickly. After devoting days to selecting the perfect hardwood floor to install in a new condo, homebuyers find their once beloved Brazilian cherry floors quickly become nothing more than the unnoticed ground beneath their feet. In contrast, their memory of seeing a baby cheetah at dawn on an African safari continues to provide delight. Testing this idea in an experimental context, Nicolao, Irwin, and Goodman (2009) randomly assigned participants to spend several dollars on either a material or experiential purchase, tracking participants' happiness with their purchase over a 2 week period. Over time, participants exhibited slower adaptation to experiential purchases than to material purchases. One reason why this happens is that people adapt most quickly to that which doesn't change. Whereas cherry floorboards generally have the same size, shape, and color on the last day of the year as they did on the first, each session of a year-long cooking class is different from the one before.
Another reason why people seem to get more happiness from experiences than things is that they anticipate and remember the former more often than the latter. Surveying a sample of Cornell students, Van Boven and Gilovich (2003) found that 83% reported “mentally revisiting” their experiential purchases more frequently than their material purchases (p. 1199). Things bring us happiness when we use them, but not so much when we merely think about them. Experiences bring happiness in both cases—and some (e.g., climbing a mountain or making love to a new partner) may even be better contemplated than consummated (Loewenstein, 1999). We are more likely to mentally revisit our experiences than our things in part because our experiences are more centrally connected to our identities. In a survey of 76 adults, Van Boven and Gilovich (2003) found that the vast majority of adults viewed their experiential purchases as more self-defining than their material purchases. What's more, because experiences often seem as unique as the people who are having them, it can be difficult to compare the butt-numbing bicycle ride we decided to take through the Canadian Arctic to the sunny Sonoma wine tour we could have taken instead—thereby saving us from troubling ruminations about the road less travelled (Carter & Gilovich, 2010).
Jones makes a great point about investing in memorable experiences early in life, since you'll then be able to enjoy them longer. (Hey STEM fetishists! Maybe this is what college is for.) When Jones mentions that "complaining about [a stressful travel experience] with your sibling years later will be a ton of fun," he slips past perhaps the most important complement to memorable experience: other people. Experience-sampling studies show that spending time with people we like is our most reliable source of good feeling, and happiness surveys show that sociality generally is the most important factor in global life satisfaction. When we invest in memorable experience with friends and family, the experience is not only more likely to be memorable, because it is shared, but is more likely to actually be remembered, because it will be relived again and again in conversation. Perhaps most importantly, sharing memorable experience binds us closer one another, and makes our ongoing relationships even more meaningful.
It's helpful to know that buying experience will do more for your sense of well-being than buying stuff. But Jennifer Aaker, Melanie Rudd, and Cassie Mogilner suggest we may do even better to think less in terms of how to spend our money and more in terms of how to spend our time. Here's the bottom line:
To get maximum happiness out of time, people need to use it in ways that cultivate personal meaning and social connections. Although the time spent strengthening your relationships with friends and family is likely to bring the greatest happiness, it is also possible to derive pleasure from 1) spending time with people not typically associated with happiness (e.g., workplace friends); 2) engaging in activities that are high in personal meaning or with a strong prosocial component, such as volunteering; 3) imagining happy experiences; 4) increasing your discretionary time; and 5) designing a life that allows your temporal expenditures to shift over the course of life—as the meaning of happiness itself shifts
Spend your money on time doing memorable stuff with people, people.