The Psychology of Spending
Dr. Thomas Gilovich, psychology professor at Cornell University, has studied the psychology of spending for over 20 years. According to Dr. Gilovich, "We buy things to make us happy, and we succeed, but only for a while. New things are exciting to us at first, but then we adapt to them." In other words, once the freshness of our newest purchase wears off, we begin looking for something else to buy to make us happy.
Dr. Gilovich found that our satisfaction with possessions fades over time. Yet our happiness over things we've experienced increases. For that reason, he has concluded that we are spending our money on the wrong things. A study out of San Francisco State University agrees. The research showed that those people who spent money on experiences instead of possessions were happier. They also thought their money was better invested.
To begin with, activities like a trip, adventure, hobby, etc. tend to bring the participants together and unite them over a shared interest. According to Gilovich, "We consume experiences directly with other people." As a result, these experiences typically create a positive link and good feelings toward the other person or people.
Besides, your experience shows others who you are and what you are. For example, you might be someone who loves taking cooking classes. More than likely, you'll become known by friends and family as a great cook. They won't know you as someone who owns the latest kitchen equipment.
Lastly, planned experiences are frequently something we look forward to. Then when the moment arrives, if we enjoy the time involved in the activity, we're left with fond memories. These memories will often last a lifetime. Even our worst trips, on many occasions, are later remembered with laughter.
