We’re told that experiences are supposed to make us happier than stuff, but it turns out that may apply mostly to the affluent. The famous marshmallow test that predicts future success, based on which kids can resist an immediate treat? That research has similar problems. Meanwhile, the jury’s still out on whether willpower is something you can “use up.”
Studies about these issues shaped a fair amount of personal finance advice in recent years. The fact that researchers may have drawn incorrect or at least incomplete conclusions reminds us that blanket advice on money is risky. What works for one person may not work for the next, particularly if their financial lives are vastly different.
Myth 1: Experiences bring more happiness. Many studies have found that people get more happiness from spending on experiences than buying material things. The 2003 study that kicked off all this research, however, revealed some socioeconomic differences: People’s preference for experiences wasn’t universal and rose with income.
Until recently, those differences hadn’t been further explored by researchers. Wendy Wood, a professor of psychology and business at the University of Southern California, suspected bias: After all, the people doing the research and the journalists writing about it tended to be middle-class or higher.
So she and two of her graduate students, Jacob C. Lee and Deborah L. Hall, examined 23 studies and conducted three of their own focusing on socioeconomic background. Their findings echoed the original study, showing that people with less education and income were happier after purchasing material goods or were equally happy about how they spent their money, whether on things or experiences.
Wood is now researching why this is true but points to theories that people of higher socioeconomic status tend to be more focused on self-development, while those with fewer resources focus more on getting their money’s worth.
“If you have a restricted budget and you can only spend a small amount of money, then each purchase has to be really worthwhile,” Wood said.