This past summer, as with many summers, I went on a road trip with my family. We drove over 2,000 miles, stayed in dinky roadside motels, hiked in several national parks, and met up with friends.
The purpose of these family road trips is threefold: 1) It keeps my kids entertained in between camp and the start of the school year; 2) It’s a nice way to see and experience the country; 3) I’m hopeful that it will create lasting memories for our family to appreciate many years down the road.
It’s the last point that comes up often when working as a financial advisor: Should clients spend money on things or experiences? There is no question that “things” are important. Everyone needs a roof over their head, a mode of transportation, a nest egg for their financial future, and other necessities. However, as viewers can probably gather, I’m also a big fan of spending time and money to create memorable experiences.
Experiences are unique in that they are an investment that continues to pay dividends in perpetuity. Using my summer road trip as an example: Before we leave, I gain enjoyment from planning the trip. I obviously enjoy going on the trip (minus the stressful parts like air travel, packing, or getting lost on a back country dirt road as it was getting dark with no cell reception). I also especially enjoy reliving my road trip with friends & family when I share the experiences many months or even years later. In short, when it comes to the decision of how to allocate my discretionary funds, experiences will generally win out over things.
Research supports my feelings. A 20-year study conducted by Dr. Thomas Gilovich, a psychology professor at Cornell University, arrived at a similar conclusion about spending on experiences over things. The research found that the happiness experienced from “things” fades quickly; we get used to new possessions quite quickly, our expectations for newer and better things keep rising, and the tendency to want to keep up with the Joneses will continuously be present. In short, it’s a never-ending cycle of temporary happiness.
On the other hand, Gilovich and other researchers found that experiences deliver more lasting happiness because they become part of our identity. We are not our possessions, but we are the accumulation of everything we’ve seen, things we’ve done, and places we’ve been. Buying a new watch isn’t going to change who you are. However, taking a break from work to hike Utah’s “Mighty Five” national parks or spending Shabbos in a Chabad in a remote part of the world, probably will. Our identity is the sum total of all our experiences.
Experiences are not only created by going on exotic trips. I like to remind myself of an interview I heard with famous comedian, Jerry Seinfeld. He was railing against how much he hates going on family trips, but really relishes what he referred to as “garbage time.” Jerry said: “I always talk about being a parent: People talk about quality time. I like to talk about ‘garbage time.’ Bowl of cereal at 11:00 at night? That’s garbage time.” In essence, Seinfeld was describing the seemingly mundane aspects of everyday life, usually with his children, that he treasures most of all. It’s important to remember that some of the best life experiences are just spending time at home and a random evening with loved ones eating cereal.
In my next video, I will discuss how one can “invest” in order to create the most meaningful experiences for their family, and children in particular, during this high holiday season.