Does Spending Money on Experiences Make You Happier?

Short answer: YES. The research is pretty consistent on it. And most retirees are spending in exactly the wrong direction.

Sunday night, my wife and I took Elliott to Comedy Cabana here in Myrtle Beach.

Tickets were $45 each.

The comedy was really, really good. We laughed for two straight hours. We talked about it in the car on the way home. We talked about it again the next day. I’m still thinking about it now, sitting here writing this.

$45.

Now think about the last $135 you spent on something you can hold in your hand. A gadget. A jacket. Something for the house. Chances are you’d have to work to remember what it was.

That’s not an accident. That’s how your brain is wired.

What does the research say about experiences versus things?

This has been studied for more than 20 years, and the findings hold up.

The foundational work came from Leaf Van Boven and Thomas Gilovich. They asked over 1,000 Americans to think of a material purchase and an experiential purchase they’d made to increase their own happiness. 57% said the experience made them happier. Only 34% said the material purchase did.

Here’s the part that stuck with me. 83% said they mentally revisited their experiences more often than their possessions.

You buy the thing once. You buy the experience over and over, every time you remember it.

Why do experiences pay better than possessions?

A few reasons show up again and again in the research.

You adapt to things faster. Researchers found that people adapt more slowly to experiential purchases than to material ones. The new car is thrilling for about three weeks. Then it’s just your car. The trip you took stays a trip you took.

Things invite comparison. Experiences don’t. Studies found that satisfaction with possessions drops when you start comparing them to what you could have bought instead. Experiences are far less vulnerable to that. Nobody comes home from a great night out and wonders if the show down the street was 8% better.

The waiting is better, too. A 2014 study in Psychological Science found people get more happiness from anticipating an experience than from anticipating a possession. Waiting for an experience is meaningful. Waiting for a new shiny object lacks depth.

Experiences become part of who you are. A jacket is something you own. A night out with your family is something you did together.

Even bad experiences can be positive in the long run.

“That which was hard to endure is sweet to remember.”
-Mark Twain

Why does this hit differently in retirement?

Because most retirees never actually spend the money.

EBRI studied what retirees do with their savings. Retirees who entered retirement with the most assets had spent down less than 12% of them two decades later. About a third of all retirees studied had more money than when they started.

Read that again. Two decades in, and the money hadn’t moved.

And when EBRI asked why, fear of running out wasn’t even the top reason. 38% were holding back for some unforeseen cost later on. 37% simply felt spending it down was unnecessary. 31% just felt better when the balance stayed high.

That last one is the real culprit. The balance is comforting. So the trip doesn’t get booked. The tickets don’t get bought. The grandkids don’t get flown in.

You spent 30 years building the number. Then you spend 30 years protecting it.

How much of this is actually about money?

Very little of it, in my experience.

That Sunday night cost less than a nice dinner for three. Most of the best moments people reminisce on cost almost nothing. A morning on the water with a son. A gathering with close friends. A celebration with family. A show that turned out to be funnier than anyone expected.

The barrier usually isn’t the $45. It’s not knowing whether the $45 is safe to spend.

That’s a planning problem, not a spending problem.

How do you give yourself permission to spend?

The permission usually doesn’t come from feeling ready. It comes from knowing the number.

When you know what your plan can support each year, spending stops being a risk and starts being a decision. Guessing is what makes people cautious. Not the market. Not the balance. The guessing.

A few things that make it easier:

• Know your real number. What your income and portfolio can support annually, based on math instead of a gut feeling.
• Keep some money easy to reach. Cash you can get to without triggering a tax bill makes it much easier to say yes to something.
• Front-load the good years. The Retirement Spending Smile is real. Your go-go years have an expiration date. Money goes further at 65 compared to 85.
• Put experiences in the plan on purpose. Name them. Budget them. Treat the trip like a line item instead of a splurge you have to justify to yourself.
• Look at the tax side early. What you pull from which account, and when, affects how much is left to spend later.

The bottom line

Money actually can enhance happiness. Just not the way most people spend it.

Once your basic needs are covered, the research points in one direction: spending on doing beats spending on having.

You did the hard part already. You saved. Now the job is different.

Go buy the tickets and have some fun.

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Jeremy Finger, Founder

Jeremy grew up in Nichols, South Carolina, where fishing with his dad sparked a lifelong interest in how money shapes our lives. Since becoming a financial advisor in 1996, he’s helped people navigate life’s biggest moments—and today, with Riverbend, he offers a calm, personal approach that helps clients focus on what matters.

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