Money Makeover Part 4: Experiences
If you’re anything like me, you look forward to the holidays. Pandemic aside, it is normally a time to gather around the table and express appreciation for family members and friends.
Unfortunately, the beauty of Thanksgiving fades as Black Friday takes over. It is hard NOT to notice the plethora of ads in your physical mailbox and email inbox:
“Our craziest sale. EVER.”
“Set your alarm for midnight Thursday night”
“Black Friday Special”
So, here’s the big question:
How do you stay true to family values when retailers urge you to stock up on the latest deals?
This is a question you’ll have to answer not just on Black Friday or Cyber Monday but every day of the year. Want to know the answer?
EXPERIENCES
Dr. Elizabeth Dunn, an associate professor of psychology and co-author of Happy Money, studies the relationship between money and happiness. She finds that happiness levels remain steady once annual household income reaches $75,000 or more. Her research further indicates that you are better off spending money on experiences rather than material items. Outsourcing also increases our happiness level because it buys us time.
Dunn’s happiness tips, according to this XY Planning Network (“XYPN”) article, include:
1. Treat yourself.
Appreciate the small, joyful moments of life. If you eat the same meal week after week, the novelty wears off. The level of enjoyment you get from a particular meal is highest when you first try it, while enjoyment from that same meal declines over time.
You don’t need to go out to a restaurant to experience something new. Meal kit delivery services like Blue Apron or HelloFresh offer restaurant-quality food with ingredients delivered to your doorstep.
One caveat: avoid “treating” yourself with tangible items. If your reward for a job well done is always a new pair of shoes, your cash will deplete fast! Instead, think about varied experiences at low or no cost that will reward your hard work.
Going to Starbucks for your favorite coffee is one possible treat, while another is taking a bubble bath. Start a fire and curl up with a good book on a different celebratory occasion. Binge watch your favorite TV show. The options are endless!
2. Buy now, enjoy later.
Anticipation boosts happiness levels because there is a natural waiting period between the time of purchase and actual consumption. Think about the last vacation you planned. You likely purchased airfare or booked the hotel in advance of the actual trip. Waiting a few months builds excitement for the excursion.
Consider pre-paying for the experience when you make travel arrangements. All-inclusive vacations are great because you pay for the meals in advance and only have to worry about tips.
3. Spend on others.
Before you became a parent, did you spend money more freely on yourself? I certainly did. As a single twenty-something, I spent at least one Saturday a month strolling around the mall (back when malls were popular), adding new items to my wardrobe. Now, as a mom, I rarely spend money on myself. Shopping = buying groceries and other household items at Target that the whole family can enjoy.
As luck would have it, my current method of “shopping” brings more personal happiness because it helps others. We are wired for connection. Our spending decisions should reflect this basic fact.
When spending on others, always revisit your family values. If you want more quality time together as a family, I’d argue that experiences are the way to go. The memories you make during an excursion are long-lasting. Do you remember playing with a particular toy during childhood, or do you remember the vacation you took in first grade?
The experiences do not need to be expensive. When we lived in Missouri, my husband Bryan took our three boys “exploring” in the woods next to our house. The boys had a blast! Now living in Florida, we enjoy family walks and bike rides. Prefer the indoors? Stock up on board games or rent puzzles from the library and work on them together.
4. Outsource
Likely, you feel your time is better spent on other activities. And activities are just another name for experiences. If you splurge and hire a housekeeper, you will probably get three extra hours that week to spend with family. Similarly, hiring an administrative assistant frees your time as an entrepreneur to focus on higher-level activities that will increase revenue.
And so, my challenge to you today is this: create meaningful experiences within your own family.
As you prepare for your next shopping excursion, think about the benefit a particular purchase will bring to the entire family. Will your child play with the toy for more than a week? Will your teen expect an upgrade to a new iPhone in six months? Are you buying something that will help or hinder your growth as a family?
Looking for more family wealth-building strategies? Get our FREE Starter Guide.
P.S. This is part 4 of the Money Makeover blog series that is focused on building wealth in alignment with your values. Did you miss the first three posts? Here are links for part 1, part 2, and part 3.