By now we have all heard that buying experiences is more likely to bring about lasting well-being than spending money on material items. This research, which dates back to 2003, is great news for the travel industry, but it might not be as great for you or me.

It’s nice to know that we should buy experiences instead of things when we have some cash we need to spend. But maybe the issue is: why do we feel like we need to spend that money in the first place?

Why don’t we ever hear about the psychological benefits of saving money?

‘Hidden costs’ of over-spending

Most Americans are not in good financial shape: 76% of households live paycheck-to-paycheck, and 85% do not have a six-month emergency fund. Overall, 72% of adults are stressed about money.

Financial distress doesn’t just dampen our weekend plans; it derails our entire lives. It is the number one threat to relationships, and can lead to serious health problems.

Given this information, should anyone be advocating unnecessary spending?

Let’s consider whether any mental health benefits gained from spending — even buying experiences — might be outweighed by anxiety, stress, or depression that subsequent financial troubles can cause.

What does the research say?

Not much, as far as I can see.

Research on the psychological impact of saving versus spending is scant (if you know otherwise, please let me know). An often-cited survey about the benefits of saving comes from an upstart bank. The bank, conveniently, found that depositing your money in it makes you feel good! Not exactly an unbiased source. Still, I tend to think they are probably right.

The Gallop poll annually finds that Americans value saving more than spending. However, this poll doesn’t address whether people actually are saving — it merely confirms that most of us know we should be doing it.

Elsewhere, researchers at Beyond the Purchase have found that people who manage their money tend to be happier than people who don’t, though saving is one aspect of many that is attributed to the broader activity of ‘money management.’ Warmer, but not quite there.

Saving money appears to be a forgotten option, both at home and in the research lab.

Here’s one recent example: Participants in a study were given a sum of money. Half were told to spend it on others or make a charitable donation, while the other half were told to spend it on themselves. The participants recorded their level of happiness before and after the experiment, and results indicated that those who spent the money on others reported greater happiness after-the-fact than those who had spent the money on themselves.

This is valuable information, but it doesn’t paint a full picture. Why wasn’t there a third group asked to save the money?

With all the interest in the science of well-being, and all the cash we have spent on happiness elixirs, self-help books, and wellness retreats, it seems we have forgotten to consider what happens to us when we simply stop trying to buy happiness in the first place . . . even happiness-by-way-of-experience. This appears to be a huge blind spot in the study of well-being.

A case study

I am a saver. It is a habit I learned from my mom. I resented her frugality when I was younger — why was I the only kid at the lunch table with a juice box instead of a Surge? But now that I am an adult, I am very grateful for the habit of mindfulness with money she instilled in me.

When I entered the work world after grad school in 2010, I began saving at least half of every paycheck. If I had to live with five roommates to do it, then so be it. The financial security it brought me was liberating, and allowed me to pursue opportunities I wouldn’t have been able to if I were cash-strapped. ‘Aggressive’ saving allowed me to walk away from my salaried job in 2015 and go into private practice. Now I’m more able to focus my career towards things that align with my values and interests.

Though I can’t quantify it, I can say with little hesitation that there is nothing — no experience, no exotic vacation, and certainly no status symbol– that could have provided the well-being I was afforded by being able to do this without financial stress.

Before you buy experiences, do the free stuff first

Obviously, we have to spend some money if we want to participate in our communities and in society at large. I’m not advocating for financial extremism (although I’m not necessarily advocating against it), but I think it’s a good practice to do the free stuff first.

Make use of the local trails before shelling out hundreds of dollars on hiking equipment for an epic hike you may never take. Play the guitar you have until the neck falls off, then get the one you’ve been dreaming about. Embrace wabi-sabi, and let your old stuff tell a story.

Here’s a list of free(ish) things I came up with:

EXERCISE

Hike a local trail Go for a walk Go on a bike ride Take your dog for a walk Offer to take a friend or neighbor’s dog on a walk Train for a marathon or other race Go out on your canoe, kayak, paddle board, or other boat Practice yoga, martial arts, other discipline Do push-ups and sit ups or other exercises around the house Play a sport (with the equipment you already have)

OUTDOORS

Go camping Go fishing Hunt for relics (just be sure it’s legal . . .. . .) Garden/plant a vegetable Look at the stars Go bird-watching Hang out on the porch Whittle

LEARNING

Read a book on your bookshelf you haven’t started Reread one of your favorite books Read a different news source than you are accustomed to Practice a foreign language Learn about a different culture Watch a free lecture on YouTube Check out a book from the library Audit a class for a local community college

ARTS & CREATIVITY

Write a poem, short story, or get started on a novel Play a musical instrument/write a song Create a beat on free software Sing Practice dancing/learn some new dance steps Paint Free-write/journal Start a blog Put on some of your favorite albums Find some new music to listen to Make a meme Write an opinion article and submit it to a local paper Create a YouTube tutorial

COMMUNITY

Write a thank you note Play a board game with friends Have a video game night Have a movie/Netflix marathon Host a pot luck Play music with a friend Start a book club Go to church/religious service Volunteer Help out a local political campaign Go to a free concert (check for events at local college) Go to a museum / art exhibit

AROUND THE HOUSE

Do some yard work Clean around the house Go through your closet and donate old clothes Plan/have a yard sale Rearrange your furniture Practice meditation Do a progressive muscle relaxation exercise Practice deep breathing Organize your movie/music/book collection Scan old photos Write down your favorite recipes Create a new recipe based on the things you have in the kitchen

FINANCE

Pay your bills Create or review a budget Read up on the stock market Review your investments Review your debts/loans Plot out how to create or build an emergency fund Create a list of things you can do for free 😉

FAMILY

Call or visit your parents Call or visit another relative Play with your children or grandchildren Play with your niece, nephew, cousin, or other relative Collect your family history from living relatives Research your family history online Compile the family history for future generations Visit a family member’s grave site Write your will

That’s almost a hundred things!

Admittedly, some things on this list require some cash — driving involves gas money, for example. But compared to an online shopping spree, most of these things will help you come out ahead on your balance sheet.

This list turned out to be a pretty accurate list of my interests and values. Further, many of these activities fall into that category of ‘things I really should be doing but never seem to have time for.’

Limiting the exercise to things that are free-ish allowed me to hone in on these things much more effectively than if I had simply listed one hundred things I enjoy doing. In that case there probably would have been a lot of things like go to the movies, which, while fun, isn’t as important to me.

Creative limitation

Often, retail therapy is just a distraction from the important things in life. Creating limitations for yourself can cause you to be more purposeful. Reducing consumption is a great way to do that.

For this reason, I would encourage you to create your own list. While it likely would cover a lot of the same ground as mine or anyone else’s, it’s also likely that you’d come up with some ideas that reflect your own unique interests. My list, for example, is pretty heavy on artsy stuff and less heavy on, say, sports. That reveals a preference of mine that might not generalize to you or others.

My list also includes some things that suggest a certain cultural background — whittlin’, for example (yep, I actually did that as a kid . . . ). Your own list will similarly reflect your interests and experiences.

In conclusion

If the idea of saving for a rainy day is just too droll, or if ‘anti-consumption’ gives you chilling visions of anarchistic soirées , then here’s another way to look at it: Every time you squirrel away some cash, you’re spending that money on your well-being.

References:

Dunn, E., Aknin, L., Norton, M. (2008). Spending Money on Others Promotes Happiness . Science. Vol. 319, Issue 5870, pp. 1687-1688

. Science. Vol. 319, Issue 5870, pp. 1687-1688 The Pew Charitable Trusts (2016). “The State of American Family Finances.”

Photo credits:

All photographs licensed under Creative Commons Zero

Learn more

Subscribe to the monthly newsletter to receive summaries of new articles.

Articles

The Hero’s Journey: Why We Covet Travel

Stress and the American Dream

The Hedonic Treadmill: From Consumerism to Minimalism

Pluralistic Ignorance: Why We Reluctantly Accept Christmas Consumerism