Happy Money: Principle One – Buy Experiences

“You can only have so much stuff, but you can never have too many stories.”  – Paul Sullivan

Great stories are one of the keys to happiness.  Not great stories that you read in books but great stories that you live.  Author Donald Miller writes about how he learned this lesson in his book A Million Miles in a Thousand Years. 

Several years before writing A Million Miles Miller had written a memoir called Blue Like Jazz that had turned into an unexpected best-seller.  After this surprising early success Miller had fallen into a funk.  He had written other books but was unable to recapture the magic.  He spent most of his time in solitary writing, was terrified of romance, and was stuck in the rut of a lonely and boring existence.    

Then one morning, out of the blue, he got a phone call from a movie director who wanted to turn his memoir into a movie.  The director and his assistant flew out to meet Miller and spend some time with him.  They talked about their ideas for the movie, most of which involved major changes to the story he had written.  They didn’t feel like his life was exciting enough to turn into a movie without embellishing it.    

At first Miller was offended by this but the more he thought about it the more he realized how right they were.  As he talked to the movie makers he learned the elements that go into a great story and he got an idea.  What if he could write his life like you write a screenplay for a movie? 

So Miller started writing some interesting scenes.  He backpacked to Machu Picchu, took an epic kayaking journey, rode his bike across the country, and set up a charity to mentor fatherless youth.  In the process he found love, meaning, and happiness.    

Through this storytelling, movie-making perspective miller had stumbled on to the first principle of smarter spending: Buy Experiences!

The Evidence

When Miller started writing interesting scenes into his life he became happier.  Was this just coincidence or is there evidence to support the theory that buying experiences makes us happy?

In Happy Money: The Science of Smarter Spending Elizabeth Dunn and Michael Norton report on an ongoing study being conducted by Thomas DeLeire and Ariel Kalil called “Does Consumption Buy Happiness.”  The study tracks people’s spending in a variety of categories.  When spending habits are compared to happiness only one category of spending shows any meaningful positive correlation.  And what is this happy spending category?  “Leisure,” which includes travel, movies, concerts, and sporting events.

So why do experiences make us happier than material possessions?  Research points to an interesting answer.  Soon after we purchase either an experience or a material possession we are equally happy with both.  However, as time passes this relationship changes. 

The shiny object we were enamored with becomes less shiny over time.  It wears out and becomes obsolete.  Before long it loses its novelty and fades into the background.  Then one day we see a new gadget and we start thinking about what we already have again, only now we think of all the things it can’t do and how we wish we could replace it. 

While this is happening our memories are also changing the experience, but in a completely different way.  Reminiscing makes the experience seem even better than it was.  The story improves with each telling.  We even look back on the difficult parts with fondness.  In fact, the difficult parts are what makes experiences memorable.  This is why people pay good money to participate in physical challenges that appear to most of us to be torture. 

As Dunn and Norton summarize, “satisfaction with experiential purchases tends to increase with the passage of time, while satisfaction with material purchases tends to decrease.”  It is important to consider this future happiness or regret when deciding whether to buy shiny objects or experiences. 

What Types of Experiences Should You Buy?

When Donald Miller first started writing interesting stories into his life they were all about adventure.  It appears he was trying to turn his life into a series of mildly entertaining YouTube videos rather than an Oscar-worthy movie.  Later he learned that true happiness requires meaning, which changed the types of experiences he purchased. 

In Happy Money Dunn and Norton provide four specific guidelines on what types of experiences you should purchase to provide the most happiness:

• The experience brings you together with other people, fostering a sense of social connection.
• The experience makes a memorable story that you’ll enjoy telling for years to come.
• The experience is tightly linked to your sense of who you are or want to be.
• The experience provides a unique opportunity, eluding easy comparison with other available options.

In other words your experiences should be unique, should strengthen your relationships with those you care about, and should assist you in becoming the person you want to be.  If you focus on these things the interesting stories will take care of themselves.

Donald Miller puts the reason experiences make us happier then possessions into sharp focus by taking us back to the movies.  He writes:

“If you watched a movie about a guy who wanted a Volvo and worked for years to get it, you wouldn’t cry at the end when he drove off the lot, testing the windshield wipers.  You wouldn’t tell your friends you saw a beautiful movie or go home and put a record on to think about the story you’d seen.  The truth is, you wouldn’t remember that movie a week later….Nobody cries at the end of a movie about a guy who wants a Volvo. 

But we spend years actually living those stories, and expect our lives to feel meaningful.  The truth is, if what we choose to do with our lives won’t make a story meaningful, it won’t make a life meaningful either.”

So get busy.  Focus less on possessions and more on the experiences that make both stories and lives meaningful.  Start writing some interesting scenes into your life with the goal of making an award-winning movie out of it.  The result will be less stuff, more stories, and more happiness!

Note: This is the second in a series of posts inspired by the book Happy Money: The Science of Smarter Spending by Elizabeth Dunn and Michael Norton.  The series will consist of an introduction and a post about each of the book’s five principles of smarter spending.