The latest issue of Money Magazine has an interesting blurb from Dan Ariely, author of “Predictably Irrational” and “The Upside of Irrationality.” In it, he tackles the issue of why you don’t necessarily get more (or lasting) enjoyment from the things that you buy.
“Why don’t you get more enjoyment from the things you buy? Because you get used to increases in your standard of living.”
Behavioral economists refer to this ongoing pursuit of happiness as the hedonic treadmill. Because you so rapidly adapt to your current circumstances and become habituated to the good (or bad) in your life, it’s difficult to get ahead.
So how can you get ahead? According to Ariely:
“The best way to maximize happiness is to spend money on things you won’t get used to… So if you’re deciding between a sofa and a vacation, go for the vacation. You’ll quickly get used to the sofa, but the vacation will bring long-lasting memories.”
In other words, focus on accumulating memories instead of stuff. All in all, I tend to agree with Ariely. My wife and I much prefer to splurge on travel vs. everyday purchases, as we get far more enjoyment out of family vacations than the latest gadget or doodad.
This isn’t to say that we go overboard on our destinations or accommodations, but we’d much prefer to spend extra time (and money) creating memories together as a family vs. accumulating more stuff in search of fulfillment.
I don’t think Dan Ariely can automatically say the value of an experience outweighs the value of a consumer product. Vacations last a week, while the sofa may last a decade. Even though memories may last a lifetime, I recommend a balance of both.
The Hedonic Treadmill doesn’t seem to be a problem for me. I spent so many years near poverty level that I appreciate nicer things and I never take them for granted. My goal is to enjoy life, regardless of my surroundings.
I agree with VT. We’re saving over $1200 a month towards a down payment on our next (bigger) house. That would fund a lot of trips, but I KNOW that it will make me quite happy to not have to rearrange the furniture whenever we have people over for dinner, or to have a patio where we can put a grill and have cookouts, or even just another toilet…despite the fact that at some point I’ll probably ‘get used to’ the bigger house.
I think that depends on what your’re buying and why. The $600 I just spent on a new refrigerator could help pay for a vacation .. on the other hand, I’m quite happy that I no longer have to throw out spoiled food or mop up leaks from the old fridge….