3 Reasons Why Buying Experiences Buys More Lasting Happiness
Our team at Keen Wealth can help you create a financial plan that will fund the retirement you want.
What we can’t do is make sure that the things you spend your assets on are going to make you happy – especially if your spending is heavy on stuff and light on experiences.
In previous posts and podcasts, I’ve talked about how important it is for retirees to stay active and engaged once they stop working. I recommend that my clients try to use that same active mindset when they’re thinking about potential purchases in retirement. Study after study shows that the happiness from a quick influx of money (an inheritance, winning the lottery) or a splurge purchase is fleeting.
The alternative is buying experiences: vacations with your loved ones; professional lessons to enhance a skill or hobby; tickets to a sporting event or musical performance that you’ve always wanted to see in person.
Here are three reasons why spending on experiences creates more lasting happiness than spending on stuff:
1. People adapt.
When you finally pull the trigger on a big purchase, you feel satisfied – especially if it’s something like a new car that you’ve been thinking about for a long time. But after a few spins around town, that new car is just … your car. You adapt. You get used to it, because it’s always there. So then, maybe, you start looking at boats ... And the cycle continues.
It might seem contradictory that a permanent possession, like a car, would produce shorter happiness than impermanent experiences, like vacations. But experiences become a part of us in ways that possessions don’t. The things we do, the places we visit, and the people we interact with all change us, imprint themselves on our identity, and live on in our memories. Even experiences that seemed negative at the time, like a vacation plan gone awry, might turn out net positive if we learn something important, or turn that terrible trip into a funny anecdote.
The misconception that big ticket purchases are going to create happiness can be particularly dangerous for retirees. Managing your spending and withdrawals from your assets becomes so important when you’re no longer living off a regular paycheck. If you get caught up chasing happiness from one expensive buy to the next, your spending plan, and your entire retirement, could get blown way off course.
2. It’s hard keeping up with the Joneses.
Nothing takes the shine off a new purchase like looking next door and seeing a nicer car, a more extensive remodeling job, a bigger boat. Material goods are easy to compare, especially with online shopping info right at our fingertips. No matter how nice your most recent purchase is, someone else is always going to have something you perceive as “better.” That won’t just cause the happiness from that big purchase to diminish faster, it also might create unnecessary stress and anxiety about your own retirement plan, and the size of your next egg.
It’s harder for us to eyeball experiences and assign them values. With all the travel deals available online these days, it’s possible that the Joneses’ week in Rome was less expensive than your weekend fishing trip in Florida. Or maybe your neighbors took what you imagine to be an expensive trip, but they went somewhere or did something that doesn’t interest you. For these reasons, we don’t compare experiences the way we do possessions, which makes it less likely that your friends are going to take a “better” dream vacation than the one you’ve been planning.
3. Big purchases can be isolating.
Scheduling your time can be a big adjustment for retirees. When you no longer have to be out the door and at your desk by 9am, you might feel like you don’t have to do anything. This is the slippery slope that can lead to so-called “retired hubby syndrome,” where one retiree putters around the house all day, driving his or her spouse batty. Buying stuff can make matters worse. That new 70-inch TV might have a beautiful picture, but it also might be the end of weekly date night at the movies.
If you’re a regular reader or listener, you might be thinking, “This is some strange advice from a guy who has an airplane.” But to me, flying isn’t a thing, it’s an experience. It’s not something I have, it’s something I do, often with my loved ones. Flying keeps my mind and body active. The rigors of my training teach me lessons in preparedness and risk-aversion that I think have made me a better financial advisor. The one-on-one trips I take with my kids create memories I’ll treasure forever. In fact, my 18-year-old son recently developed an interest in flying and he earned his pilot’s licenses just a couple months ago. We’ve been enjoying more time together in the air, and flying is an experience that we will share for a lifetime.
It’s nice having nice things. If you’ve worked hard and invested wisely, you deserve to get as much enjoyment as you can from your retirement assets. Just be mindful that not all purchases are created equal, especially if happiness is your goal. You won’t be able to fit your grandkids in the back of a new sports car. But your whole family will fit in a new camper, and the experiences you’ll all have travelling together won’t break down or go out of style anytime soon.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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