Chicago mom Lori Holton-Nash would rather spend her money on creating family experiences than on acquiring junk.
Her kids cleaned out their closets this week and found a bunch of clothes and toys that ended up in the garbage bin. "But memories never become clutter," she said.
Holton-Nash may be onto something--purchasing an experience brings happiness that increases over time while satisfaction from material goods fades away, according to a new study from Cornell University, which surveyed 142 participants about their satisfaction with previous purchases.
With consumer confidence on the rise in March but still far from healthy, according to the latest Consumer Confidence Index released by the Conference Board, shoppers are still wary to spend. But frugal buyers can maximize their money by purchasing memories, which last longer than toys or gadgets, said Thomas Gilovich, the study's lead researcher.
Shoppers second-guess their material purchases, compare them to others' belongings and often "adapt" to new purchases so much so that they don't even notice they have them anymore, which kills the initial shopping high, he said.
"But the experience of holding my daughter's hand when we went scuba diving is irreplaceable and that's a part of me," he said. "We are pretty literally the sum of our experiences and we can't trade those in."
Holton-Nash, better known as blogger "Miss Lori," agrees. So when she was invited to the Disney Social Moms Media Conference at Disney World in February, she not only said yes, she brought her four kids too.
"It was a huge opportunity, which is why I kind of leveraged everything to be able to take my children," she said, adding though finances are tight the memories were worth footing the bill.
Experiences not only bring long-lasting satisfaction, but are an invaluable way to bring people together and help them relate to one another, Gilovich said, which means money really can buy happiness.
And family travel is on the rise, with three-generation vacations a frequent occurrence, said Travel Consultant Pat Taylor of Beale Travel Services Inc., a Chicago travel agency.
"It's not unusual to have a client in his 70's or 80's bringing the whole family," she said, "People get more and more frivolous in their old age because they can't take [their money] with them, so why not have the experience, create the memory?"
Customers have requested anything from a circumnavigation of South America by private jet to elephant rides in Jaipur, India, she said.
"They've got houses loaded with possessions, now they want the bragging rights," she said.
Experiences will just get better with time because people like to romanticize the past, said Don Elligan, a Chicago psychologist, so they're just a gift that keeps on giving.
"Our memories oftentimes are kind of glossy snapshots without the details," he said. "We tend to remember the positive."
Though people looking to stretch their dollar may think buying a piece of artwork or a sweater will last longer than a concert or baseball game, frugal consumers should take note, Gilovich said.
"This is one way that people can maximize the value you get from money," he said. "Spending it wisely and spending it on experiences does pay off."