You buy things to meet one or a combination of three psychological needs:
1. Identity expression (to reflect your true values)
2. Competence (to use or develop skills and knowledge)
3. Relatedness (to bring us close to others)
Meeting these needs helps you live a happier life. So, how can you best spend your money to make yourself happier?
It’s often said that an effective way to live a happier life is to spend your money on life experiences, not material items. As the story goes, you’ll be much happier if you go to a concert with friends than if you buy new clothes for yourself. But, as a new study has found, past research on this subject has ignored a third driver of consumption as it relates to happiness: “experiential products.”
Experiential products are items that “engage our senses”. These are items that enable intellectual, creative, and athletic achievement. Examples include: books, films, paintings, a pencil and notebook, a paintbrush and canvas, a basketball and net, and a musical instrument.
When you buy and use these experiential products, they are just as effective as the revered “life experience” as a means to live a happier life. These are material items, but you can use them to express yourself, to get smarter and healthier. The researchers found, consistent with past research, that while buying material objects like clothes and jewellery can be help you express yourself and connect with others, it is not as effective as buying an experiential product or life experience.
But experiential products and life experiences aren’t interchangeable. The study also found that while life experiences and experiential products are similar in their ability to meet identity expression needs, experiential products are better when it comes to becoming more competent, while life experiences are better at helping you connect with others. In other words, when you want to achieve something, buy the corresponding experiential product. If you’re lonely and want to be close to others, life experiences are the way to go.
In my opinion, money can’t buy complete happiness. But if we spend it properly, it can help. Don’t depend on sports cars and jewellery as your ticket to well-being. Instead, buy both life experiences and experiential products and you’ll be well on your way.
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To learn more, be sure to check out the study here. If you have any ideas or feedback you’d like to contribute, write a comment below or send me an email.