The Best Use of Money
The idea that spending money to buy experiences rather than ‘stuff’ has been gaining mainstream momentum in America. People are realizing that there is more marginal benefit to their happiness when they allocate their dollars towards experiences (travel, entertainment, classes, adventures, etc.) rather than material goods.
This is of course because most of us (certainly those I see sharing the above opinions) have surpassed the basic material needs of food & shelter. The physical goods purchased after that point have diminishing returns – at a certain point the clutter may even cause new purchases to create negative returns.
I’ve been thinking on the topic of allocating money towards happiness and wanted to share my thoughts. I agree fully that experiences are a better use of money than stuff – but I see these as the first two steps of a spectrum. A spectrum that I have been able to track a bit further, though I’m not certain I’ve found the end.
The spectrum of how to spend your money to achieve the greatest happiness. Happiness increases per dollar increases as you go down the list. (The starting point assumes basic needs met)
- Buy things – TVs, cars, watches, a big house, a boat, an iPad
- Buy experiences – vacations, classes, entertainment, exciting adventures, climbing mount everest, running a marathon
- Buy not-experiences – use your money to buy your freedom from things you don’t enjoy: a bad boss, horrible commute, stressful job, nagging injury, etc.
- Buy nothing or invest – gift your money to a future version of yourself that might need it for one of the above. Essentially buy yourself peace of mind for the future.
- Give it away to those in need – use what you have to help those that have not yet been able to secure their basic needs of food, shelter, health & freedom from oppression
It seems incredibly simple when you look at it that way. When we tap into our empathy we know it to be true that the life of another human far outweighs the benefit of a television or exotic vacation. The challenge is in removing the boundaries that distance our daily purchasing decisions from that realization.
If you enjoyed this post, you might also like a few other posts I wrote about minimalism: