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The Happiness of Spending: Things vs. Experiences
As you step into retirement, your hard-earned savings should be used in ways that bring the greatest joy and fulfilment. The age-old debate between spending on material possessions versus experiences has been settled by modern psychology: spending on experiences provides deeper and longer-lasting happiness than buying things.
My sketch beautifully illustrates this principle—while the joy of purchasing material things fades over time, the joy of experiences tends to grow. But why is this the case?
Let’s explore the research and wisdom that supports this idea.
The Science Behind Happiness and Spending
Insights from Happy Money by Dr. Elizabeth Dunn & Michael Norton
Dr. Elizabeth Dunn and Michael Norton, in their book Happy Money: The Science of Smarter Spending, provide compelling evidence that money spent on experiences leads to greater well-being. They outline several reasons why experiences provide lasting joy:
Experiences Create Stronger Social Bonds
Humans are social creatures, and experiences often involve friends, family, or new people we meet. These social connections are one of the strongest predictors of happiness in later life.
Memories Appreciate Over Time
Unlike material goods that wear out or become outdated, experiences become cherished memories that can be recalled and enjoyed indefinitely.
Experiences Form Part of Our Identity
While we may quickly forget a new gadget, experiences shape who we are. Travel, learning, and engaging in meaningful activities contribute to personal growth and fulfilment.
Anticipation Enhances Joy
Looking forward to an experience, such as a trip or a concert, brings excitement and happiness even before it happens. This is known as positive anticipation, which research shows is often more pleasurable than waiting for a material purchase.
Less Buyer’s Remorse
We tend to compare material things, wondering if we got the best deal or if something better exists. Experiences, on the other hand, are unique, making us less likely to regret spending money on them.
Research from Positive Psychology
A study by Thomas Gilovich, a psychology professor at Cornell University, found that people experience more enduring happiness from experiential purchases than from material goods.
His research concluded that material things provide only temporary pleasure due to a phenomenon called hedonic adaptation—we quickly get used to new possessions, and they stop making us happy.
On the other hand, experiences provide lasting joy because:
They involve personal growth and self-discovery.
They enhance storytelling and shared moments with others.
They allow us to relive them mentally, reinforcing happiness over time.
Lessons from Wisdom & Philosophy
The idea that experiences bring more happiness than possessions is not new. Throughout history, great thinkers have emphasised this truth:
Aristotle believed that true happiness comes from engaging in activities that fulfil our potential, rather than accumulating wealth or possessions.
Seneca, the Stoic philosopher, warned against the fleeting nature of material wealth and urged people to invest in wisdom and meaningful experiences.
The Buddha taught that attachment to material things leads to suffering, while experiences like meditation, travel, and learning bring deeper contentment.
Practical Tips for Spending Wisely in Retirement
As you plan your retirement spending, consider these ways to maximise happiness with your money:
Travel and Explore
Seeing new places and cultures enriches life and creates memories that stay with you forever.
Invest in Learning
Take up a hobby, join a class, or learn a new skill—intellectual engagement keeps the mind sharp and fosters joy.
Prioritise Time with Loved Ones
Instead of buying expensive gifts, treat your family or friends to shared activities like a weekend getaway, a concert, or a nice meal.
Support Meaningful Causes
Giving back through volunteering or donating to causes that align with your values brings a deep sense of fulfilment.
Savour Small Joys
A sunset, a walk in nature, or a heartfelt conversation can bring more happiness than any material purchase.
Conclusion: Spend to Enrich Your Life, Not Just Your Possessions
In retirement, the goal is not just to ‘manage your money’ but to use it to enhance life’s quality.
Research, history, and wisdom all point to the same conclusion: spending on experiences brings deeper, more lasting joy than accumulating things.
So, as you map out your retirement spending, ask yourself:
Will this bring me a story to tell, a memory to cherish, or a connection to others?
If the answer is yes, then it’s likely money well spent.
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