March 2025
When it comes to how we spend our hard-earned money, it’s often said that the choices we make reflect our values, desires, and motivations. Over the years, psychologists and economists have conducted extensive studies to understand the drivers behind consumer spending. One key area of interest has been the comparison between the spending on experiences, such as vacations or concerts, versus material goods like clothing, electronics, or cars. While it may seem like an individual’s preference is simply a matter of taste, the truth is far more complex. The science behind these decisions can provide profound insights into human behavior, happiness, and satisfaction.
One of the primary reasons people choose to spend money on experiences rather than material goods is because experiences tend to provide greater long-term happiness. Numerous psychological studies have found that spending on experiences, such as travel, dining, or attending live events, leads to lasting feelings of joy and fulfillment, as opposed to purchasing tangible objects. The reasons for this lie in the nature of what experiences offer: connection, novelty, and the ability to create lasting memories.
Humans are inherently social creatures, and experiences often provide the opportunity to share memorable moments with others. Whether it’s a family vacation, a concert with friends, or a shared meal at a restaurant, experiences foster social bonding and connection, which are crucial to emotional well-being. In contrast, material possessions can sometimes isolate us or even lead to envy when comparing what we have to others.
Furthermore, experiences have a unique way of creating lasting memories that can be recalled with pleasure over time. The brain processes and stores memories of experiences in a way that is distinct from material goods. While a physical object may lose its value or appeal after some time, the memories of a well-spent trip or an exciting event remain vivid and often provide ongoing emotional returns. These memories act as a source of happiness that can be drawn upon throughout life.
Another aspect of experiences is the sense of novelty they provide. New experiences, especially those that involve unfamiliar activities or destinations, stimulate the brain and provide a rush of dopamine, the "feel-good" neurotransmitter. This sense of excitement and discovery is something that material possessions often cannot replicate. Once an object is purchased and its novelty wears off, it can lose its ability to bring the same level of satisfaction.
On the other hand, spending money on material goods is also rooted in psychological needs and desires. Material possessions are often linked to identity and self-image. The things we own can signal who we are, what we value, and sometimes, how we want to be perceived by others. A new car, a designer bag, or the latest tech gadget can serve as a symbol of success, status, or personal taste. For some people, these external indicators of wealth or achievement can provide a boost in self-esteem, at least temporarily.
However, research has shown that the happiness derived from material goods tends to be more short-lived compared to experiences. This phenomenon is often referred to as the “hedonic treadmill,” a concept in psychology that explains how people tend to quickly adapt to new possessions, leading to a decrease in satisfaction over time. Once the novelty of a new purchase fades, the emotional impact diminishes, and individuals often feel the need to acquire more or different material goods to recapture that initial sense of pleasure.
This cycle can lead to a constant pursuit of new things, which may result in a never-ending craving for more possessions. It’s important to note, however, that while material goods can bring temporary joy, they can also serve as valuable tools or symbols in our lives. A new phone, for example, may not only offer enjoyment but also convenience and functionality that enhances daily life. In this sense, the enjoyment we derive from material goods is not solely based on superficial desire but can also be linked to practicality and utility.
In modern society, our spending habits are also heavily influenced by culture and social media. Advertising and social platforms often shape our desires, encouraging us to purchase the latest trends or showcase our lifestyle choices. The pressure to appear successful or well-traveled can drive people to make purchases, whether they’re material goods or experience-based. Social media, in particular, has created a space where individuals can publicly display their life’s milestones and possessions, making the distinction between experience and material purchases even more blurred.
While material goods are often shown as symbols of achievement, experiences are increasingly highlighted as a path to a fulfilled life. Platforms like Instagram and TikTok have made travel, food, and adventure an aspirational goal for many. The constant sharing of “perfect moments” online can make individuals feel as if they are missing out on these experiences, further fueling the desire to spend money on new experiences in an effort to keep up with the trends.
This cultural shift has led to a shift in consumer behavior as well. Many people, particularly millennials and Gen Z, are prioritizing experiences over material possessions. A study by the US-based consulting firm, Eventbrite, found that 78% of millennials would rather spend money on experiences than on material things. For younger generations, experiences offer a deeper sense of meaning and fulfillment than acquiring new possessions.
Ultimately, the decision to spend on experiences or material goods depends on personal preferences, circumstances, and values. For some, owning certain objects may enhance their quality of life and provide them with a sense of comfort, control, or success. For others, the pursuit of experiences may align more with their desire for connection, novelty, and self-discovery. The key lies in understanding what brings long-term satisfaction and what motivates one’s spending decisions in the first place.
It’s also worth noting that spending money on experiences doesn’t mean that material possessions lose their place entirely. There can be a balance between acquiring things that enhance one’s life and seeking out experiences that enrich one’s sense of well-being. What’s important is to recognize that happiness is not found solely in possessions or experiences but in the meaning and connections we derive from both. As we continue to navigate a consumer-driven world, understanding the science of spending can help us make more mindful decisions that contribute to a fulfilling life.
