We’ve all heard the timeless debate about the merits of spending money on experiences over stuff. While we could talk all day about the pitfalls of materialism, arguing over the form it takes, whether in the form of experiences or things, is pretty silly because, in the end, it’s impossible to separate the two. When we go on a trip or pursue a hobby, we inevitably consume stuff along the way. And when we buy stuff, we’re creating an experience in the process. There seems to be a cultural assumption that experiences are the better purchase, but does anyone really believe that a person who enjoys gardening is somehow wiser than a person who loves fashion just because the former revolves around an experience and the latter around material goods? I happen to love hiking (mostly experience) and vintage cars (mostly stuff). Am I being wise when I spend money on a hiking trip but foolish when I buy parts for my old Volkswagen Van? Well…maybe in this case.
Either way, generalizing about personal financial decisions can lead to trouble because people (and their lives) are incredibly unique. When we stop thinking about purchases in terms of good or bad and start thinking about them in terms of personal values, we can begin to make more meaningful decisions about what we want to spend our money on, and the more our financial decisions align with our personal values, the greater sense of financial wellbeing we’ll experience. Whether we’re thinking of spending money on experiences or stuff, we shouldn’t feel guilty about buying the things we enjoy. That is, unless we’re spending for the wrong reasons or spending money in a way that undermines our values and wellbeing.
Spending for the wrong reasons
People spend money for the wrong reasons in countless ways: impulse, to ease emotional pain, or simply out of boredom. The most common “wrong reason” I see is spending for esteem. This can take many forms, from experiences like a high school senior chasing the “cool” Spring Break destination to be noticed, or a housewife picking up new hobbies just to show them off on social media. It can also involve products, like splurging on a luxury car. Since there’s nothing inherently wrong with fun trips, hobbies, or nice cars, how can we tell if a purchase aligns with our values or if it’s just an attempt to keep up with the Joneses?
To figure this out, assess your enjoyment over time: How long was the purchase enjoyed before the search began for the next thing or experience? Does the nice car turn into just a daily driver in a couple of weeks, or does it add joy to the commute day after day? Did the trip create lasting memories that bring joy every time they come to mind? Moods change, but values tend to be fixed. If comfort and dependability are valued, a car that provides those will continue to deliver value. If adventure and time with friends are priorities, that destination trip shared with cherished people will likely be treasured for years.
Alternatively, if we spend money because we’re trying to “keep up with the Joneses” (and we’ve all done it at some point), enjoyment will fade the moment someone else’s trip shows up on our Instagram feed, or the local dealership will lure us in with the next luxury vehicle with “easy” monthly payments. When motivated by appearances, the satisfaction from a purchase diminishes quickly. So, when considering a purchase, it helps to pause and ask: “How long will this bring enjoyment?” and “Why is this important to me?” These simple questions ensure maximum enjoyment from the things and experiences we buy.
Spending that undermines values & wellbeing
While spending for the wrong reasons can certainly cause financial harm, spending that undermines our values and wellbeing often creates the most damage. This type of spending generates strain and worry, no matter the income level. Picture a couple with a great income who feel like they can’t slow down because of a mortgage on an extravagant home, expensive cars, and the like. While there’s nothing wrong with extravagant homes or expensive cars, these can start to feel like expensive handcuffs if they don’t reflect personal values. If someone truly craves experiences like peaceful fishing trips and time with family, all the material possessions in the world won’t fulfill that. The path to reducing financial strain and truly enjoying money lies in getting crystal clear on what we value.
Spending can go beyond undermining values. It can harm wellbeing in key ways. This usually happens through overspending without reserves, which takes a toll on health, relationships, and peace of mind. It also occurs by elevating one set of values at the expense of others’, damaging relationships and thus harming everyone’s wellbeing. For example, consider a man constantly scrimping and saving, skipping family vacations, and patching up beater cars because he values building wealth and “getting ahead,” while his wife grows miserable from missing out on what matters to her. This lack of financial alignment in a relationship will eventually undermine both parties’ wellbeing.
How and why we spend money is more important than what we spend on.
Whether the preference is for experiences or stuff, there’s no wrong choice, even if it’s expensive. In fact, enjoyment is an excellent reason to spend money! Trouble arises, though, when spending comes from the wrong reasons or undermines values and wellbeing. Spending to keep up with the Joneses tends to yield much less benefit, no matter what it is, but spending on what’s personally important leads to longer-lasting enjoyment. Being mindful of the why and how behind spending helps sidestep the whole “experience” vs. “stuff” debate and allows each of us just enjoy our money.