Spending money on material items makes us less happy than spending money on life experiences.
That scenario also makes us less popular among our peers, according to a recent study from the University of Colorado at Boulder. "The mistake we can sometimes make is believing that pursuing material possessions will gain us status and admiration ...," said the lead author, Professor Leaf Van Boven. "In fact, it seems to have exactly the opposite effect."
If we should be putting our money toward making memories, why do we spend so much on "stuff" for ourselves and others?
As you head into the holiday season and start to compile your gift list, give some thought to the benefits of experiential spending. According to the authors of the study, positive emotions attached to an experiential purchase stay with us far longer than those associated with a material buy. Giving the gift of experience probably means that you'll be giving something that involves social interaction, which feels good, and is also something that will be relived long after the experience. Even if the experience doesn't go exactly as planned, we are still inclined to remember and share positive aspects of it. Also, we're less likely to judge experiences the way we do with our possessions.
This year, instead of creating a holiday list filled with stuff to buy, consider a list of less-expensive experiences to give: Treating a friend to a brunch and hot yoga instead of a new sweater, or taking your dad skating and out for a beer instead of wrapping up another gadget is a smart investment of your time and your money. It will also give you a pass from the crowded malls and significantly increase the joy factor for you and the lucky recipient of your gift.