The experiences vs. stuff post

Lots of research from here and there suggests that people get longer lasting happiness from buying experiences than from buying stuff.

Obviously that means we should all become minimalists and travel the world, right?  Get 100% experiences and 0% stuff because experiences are always superior to stuff.

Obviously that’s silly.  (As is streaking through the world…you’re likely to get arrested.)

When we try to decide whether to do more of one thing than another, we’re interested in how much additional happiness an additional unit of each thing will give us.  This concept is termed, “marginal utility.”  We want to know how much happier one unit of something is going to make us.  We’re not interested in how happy all of the things we already have are making us, just how much adding or subtracting a unit of each thing will make us.

The canonical example of marginal utility (and diminishing marginal utility) is that of pizza.  Let’s say you’re stuck in Detroit on a weekend at 6pm at the conference center, starving, and the only place open is Sbarro at the attached mall.  The first slice of pizza gives a high marginal utility.  You’d be willing to pay a few dollars for it.  The second slice of pizza you don’t really need so much, so you’d only be willing to pay a couple of dollars for it– if it costs $3.50 you’ll only get one slice.  A third slice of pizza you might be willing to take free.  A fourth slice and you’re not really interested.  The happiness you get from pizza is determined by both the inherent value of the pizza and how much pizza you already have inside of you.  (And if you’re trying to decide between pizza and a beverage, the beverage gets more attractive compared to pizza the more pizza you eat.)

In this framework, experiences aren’t automatically better than stuff.  If you don’t have a lot of stuff, stuff becomes more valuable.  If you have a lot of stuff, travel becomes more attractive by comparison.

Basically what this happiness research is showing is that people in general have too much stuff and not enough experiences, so the marginal utility of an additional experience is greater than that of an additional unit of stuff. (Americans have too much stuff–did we really need a study to show that?  I thought the rubbermaid commercial made it pretty clear!)

Those of us who travel a lot don’t feel the need to travel anymore because we’ve long since hit diminishing marginal returns to happiness on travel.  Especially if we don’t have as much stuff as the average American.

So don’t take the research on happiness and experience as a mandate to get rid of all your stuff and spend all your time traveling!  There’s nothing wrong with you if you’d rather buy a china cabinet than spend a week in Tahiti.  Maybe for you the marginal utility of an additional unit of stuff is greater than the marginal utility of an additional unit of travel.  Maybe you have plenty of time to engage in your hobbies and not a ton of income, so adding to your wardrobe is more important than buying more time.  Maybe you don’t spend enough time at home doing nothing and would like to spend more.  We all have different values for these things in absolute terms and we all have different stores of these things.  Thus we all get different marginal utilities.

Just because the average American needs to declutter and travel more doesn’t mean you do too.  And that’s ok.

And maybe, just maybe, you want to buy thousands of books and nice shelves to put them in and a house big enough for a library and a comfy chair to read in.  In which case, we salute you.  (And secretly hope you invite us over to share.)

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33 Responses to “The experiences vs. stuff post”

  1. Liz Says:

    Love this post! Thank you for someone saying it…

  2. Spanish Prof Says:

    Great post! I am now working towards the library goal! I think I tried to say something similar in my post from a few weeks ago over what would you be willing to give up in order to spend a 2 weeks vacation at your dream destination. I realized that I was not willing to give up much.

    • nicoleandmaggie Says:

      It is good to have goals, but we should have goals that make us happy rather than goals that other folks tell us will make us happy. Unless we really trust that other people know what’s better for us. ;)

  3. MutantSupermodel Says:

    Experiences don’t automatically equal travel. That’s what drives ME nuts about the arguments for stuff over experiences.
    Experiences can be learning things, trying something new, working with charities, attending a concert or other local event, planning a party, starting a group, etc.
    For some reason, people hear “experiences” and automatically say “YES! I must SEE THE WORLD!” but really it doesn’t have to be that fancy or overwhelming.

  4. First Gen American Says:

    Great Pizza analogy. The first time I went to Amsterdam for work, it was pretty darn cool, especially since I wasn’t paying, but by the 5th time in the same calendar year, well, it got old.

    The other thing with stuff is that if you have too much of it, your time vs stuff balance gets out of whack. You may have lots of sporting equipment but only so many weekends to go do the weekend warrior thing. So you may get more value out of 1 mountain bike than having a mountain bike, road bike, scuba gear, kayaks, canoes, camping gear, climbing gear, etc. If I bring it back to food, the double cheeseburger has too much meat (stuff), but not enough bread (time to use the stuff).

  5. hush Says:

    I agree – “So don’t take the research on happiness and experience as a mandate to get rid of all your stuff and spend all your time traveling!”

    We all have our own preferences. Few things in life are ever a one-size fits all. I think the trick is to really be in touch with the values and goals you may have yourself versus what the clever marketers of the world are trying to sell.

    I loved @MutantSupermodel’s observation that “experience” doesn’t always equal “travel.” Right now I’d like to experience some sleeping in, followed by reading some good/bad cliterature. Unfortch I have to do actual work today.

    • nicoleandmaggie Says:

      It’s not just that people have different preferences, but that you want less of the same thing and more of different things as you get more things. So even if you need only 6 hours of sleep per night, if you’re getting 5 you’re going to want more additional sleep than someone with a sleep need of 8 hours who is getting 9 per night.

  6. bogart Says:

    Is cheese stuff, or an experience ;)?

  7. Molly On Money Says:

    Thank you Mutant Supermodel for reminding us that experiences don’t always equal travel.
    I’ve felt deprived of travel experiences lately but full of day to day experiences (like hiking). It’s not always a perfect balance but your post is a good reminder to keep what’s important the top of my priorities and (again) not what’s important to others!!

  8. Everyday Tips Says:

    I totally agree with Supermodel. I am one of those people that is more than willing to spend money on experience, but that does not always mean travel. To me, it is the money spent on the Science Museum annual pass, or the picnic lunches we take to Lake Huron every summer. It is the money I spend on soccer and really even private school tuition for my kids (their experiences, not mine). Very little money in our house is spent on anything material outside of necessities. However, not a high percentage of our income is spent on travel either.

    By the way, you don’t have to feel ‘stuck’ in Detroit!

    • nicoleandmaggie Says:

      You do when you’re in the convention center. I swear there is NO WAY OUT. If I recall correctly in order to get out, you have to take the elevator down to the first floor, then walk around to find an escalator to the second floor, then find a covered pathway that takes you to another building. Only then can you leave. I decided the entire building is a metaphor for the city.

  9. Z Says:

    Then there is upkeep of your stuff. I gave up great summer travel for home maintenance. To do the home maintenance I had to move my stuff around, so I got rid of some of it (I don’t have excessive amounts). I am flat out amazed at how much happier I am at home now that certain things are fixed. I didn’t know…

  10. oilandgarlic Says:

    I just wrote about this (strange minds think alike?) mainly to justify my upcoming retail therapy session. Your post is much more thoughtful!

  11. Buying Stuff For Happiness? | Oilandgarlic's Blog Says:

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  12. Cloud Says:

    As someone who once took a 4 month leave of absence to travel the world, I clearly prioritize travel. It is one of the things I miss most about my pre-kids life. I know that we’ll get to travel again eventually, but boy, I have itchy feet these days. (The problem isn’t that we’re afraid to travel with kids- it is that all of our time off goes to sick days. Damn the person who invented the concept of “paid time off” instead of sick days + vacation days….)

    But I also know that at the end of those 4 months, I was ready to not travel for awhile!

    As a completely unrelated aside, I have noticed that the reaction I get to saying I’ve taken 4 months off to travel is universally positive. No one has ever said a bad thing about this “career break”. Now, my two three month long maternity leaves? Those were apparently unfair to my employers in the minds of some. (For the record, my employers paid me nothing during all of these breaks- my partial pay during maternity leave came from disability insurance and family leave “insurance” that all employees and employers at companies > 50 people have to pay into in California.)

    • nicoleandmaggie Says:

      If it makes you feel better, I’d feel totally annoyed if an employee took 4 months off to travel. Though I suppose if it were planned in advance and I wasn’t paying for it, I would figure something out.

      • Cloud Says:

        I was working as a contractor/consultant at the time. So I finished a project and just didn’t start another one for 4 months. All I cost the employer was the profit they would have made on my hours.

        And I was prepared to quit the job if they said I couldn’t go….

      • nicoleandmaggie Says:

        With contractors one expects those kinds of gaps– if not traveling the world, they’re busy with other clients!

  13. frugalscholar Says:

    We’re going to France this summer AND doing a little remodeling when we return. Experience AND stuff. (We waited 20 yrs for the remodel, so it’s definitely time).

    Love learning new terms from you.

  14. Carnival of Personal Finance #311: the Filboid Studge edition | Miss Thrifty Says:

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  15. Paula @ AffordAnything.org Says:

    I love this post! I totally experienced the “marginal utility” of travel after I traveled for 2 years. When I returned, everyone imagined that I’d be antsy to leave again — but instead, all I wanted to do was buy a home, plant a garden and adopt a pet, all of which are “anchoring” activities rather than vagabonding-traveling setups. For me, the marginal benefit of yet another 2 months overseas paled in comparison to the joy of building a home.

  16. Jacq Says:

    I’ve never understood this debate between stuff and experiences. ALL stuff gives off some kind of experience so it just seemed like a totally pointless semantic debate. I also think the research is kind of b.s. as well, but that’s another post…
    I don’t like most travel. Wish I had gone racier places when I was in Amsterdam though but the friend I went with couldn’t afford it at the time.

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