You can’t spend all of your money on experiences and you shouldn’t try to. Material goods can certainly generate happiness at least under the right circumstances. So you might find useful to have a couple of tools that can help you become more satisfied with your decisions of all sorts.
Think about the experiences your purchases provide
The first recommendation is to think about your purchases whether experiential or material in terms of the experiences they provide. That’s easy for a vacation or concert it’s harder for material goods like cars or computers, but it’s still possible. Suppose that you purchased a new computer last year.
I can promise you that since that time someone else pay less for a much better computer. That always happens, it’s easy to regret technological purchases when you think in terms of price and features. After all, since the beginning of the electronic age prices have always gone down and features have always improved.
But think about the experiences that computer has provided: watching digital photos, communicating with distant relatives or even playing games. Research shows that thinking about material goods in terms of the experiences they provide leads to more satisfaction with the purchase.
That’s a good thing! It’s not helpful to regret our purchases especially when that regret comes from factors outside our control, like the fact that there’s now a better deal. In a moment’s reflection will reveal that nearly all material purchases can be framed in terms of experience: toys, clothes, food, artwork.
These all hold value in part because of the experiences they provide. Thinking about those experiences and the resulting memories makes it easier to see the value of those material goods. When you think about your experiences you have a better sense of what’s really important.
Think in terms of time not money
The second recommendation is to think in terms of time not money. Two researchers in a business school ran a wonderful experiment. They set up a lemonade stand in the San Francisco Park with a real six-year-old as the salespeople. On a large easel to the left of the stand they placed several signs to attract customers.
One of the signs read spend a little money and enjoy C&D’s lemonade, another red spend a little time and enjoy C&D’s lemonade and the third did mention either money or time. The researchers change to a different side every 10 minutes and they measured how many people purchase lemonade while each sign was being displayed.
They found that people were twice as likely to stop and buy lemonade when the sign read spend a little time compared to when it read spend a little money. Customers were also allowed to pay what they wanted for the lemonade, as little as one dollar or as much is three dollars.
They spend a little time customers payed near the maximum almost twice as much as a cheapskate spend a little money customers. A simple sign prompted people to think about time and suddenly they became more likely to purchase a product and they paid more for it.
The likely reason was that people started thinking about purchasing lemonade as an experience, they would stop talk to cute kids support a worthy cause and then enjoy a nice glass of lemonade on a Saturday afternoon. Those experiences are surely worth much more than three dollars.
The sign reminded people why they were in the park in the first place: to have a positive experience. A sign emphasizing money in contrast makes people think of the lemonade as a material good. Most potential customers work in the park seeking out something to drink and besides the stand is being manned by six-year-olds, they probably don’t make particularly good lemonade.
If you just want material goods some drink to quench the thirst your money might get you more at the professional vendor or at the vending machine instead. Thinking about time forces us to consider our experiences how will feel what will get to do.
We start prioritizing different things with whom will connect how will feel what will remember will see the smiling kids standing behind the stand not just the water down lemonade. Happiness comes from our experience. That’s an old idea, it predates behavioral economics and even scientific psychology.
But even old ideas can be clarified and given structure by new science. David Hume knew the importance of this idea. He ended his masterwork on moral philosophy with these simple words: “natural pleasures indeed are really without price; both because they are below all price in their attainment and above it in their enjoyment”.