Let me tell you a story about a vacation my wife and I took this summer. It was a great trip; we rafted for six days through Grand Canyon, including sleeping right next to the Colorado River. Let me tell all the things that went wrong on this trip:
The airport in Minneapolis was evacuated when we got there, and nobody was let in for about an hour and a half after we got there.
Once they let people in there was a stampede to both the ticketing line and security.
We were let into the airport after our plane was set to leave - the plane didn't leave without us but we had a connection we were at risk of missing.
Once we got to Denver, we were delayed about three times, which we liked at first because it allowed us to get there without missing our connecting flight.
Our flight was eventually canceled. We need to get to Las Vegas that day because we were getting picked up at the hotel at 4 am the next day.
Driving was going to take 13 or 14 hours, getting us to Las Vegas at about 1 am. We were lucky and got on a standby flight.
The first day it rained on us, which made it really cold.
There was a woman who had a seizure on the trip, so the guides had to call a helicopter with a satellite phone to get her out of there.
We slept in the tent the first night (as opposed to sleeping outside on cots) because we were spooked by the rain. It was VERY hot.
I got bit by a fire ant; those sting!
My wife fell off a waterfall, causing her arm to swell and bruise from shoulder to wrist!
It down poured on us in the middle of the night while we were sleeping outside.
It rained on us another day, but it was colder, windier, and it hurt when it pelted us.
At the end of the trip, we were unable to get out of Grand Canyon due to weather, so we were stranded on the side of the river for over an hour with nothing to do.
Once we got out of Grand Canyon we were stranded in the middle of nowhere waiting for flights to Las Vegas. We were there for about six or seven hours.
As you can see, this sounds like a miserable trip. But, it turns out it was a great trip.
What's Going On Here?
When we experience something, like a vacation, daily walks, hikes, or trips to the park, we store these experiences in our memories. Over time, our minds tend to remember the good times; even exaggerate the good times. At the same time it tends to forget about the negative aspects. If we don't outright forget, we tend to look back and laugh at these experiences. Have you ever looked back and laughed at something that, at the time, was incredibly horrible? This happens to me when I look back and remark how I got crabby after skipping a meal or having a laugh about how I fell off of a bus and broke my ankle. Meanwhile, when I look back at the happy hours I've had with people where we enjoyed playing Devil's Advocate for each other's arguments, I remember how fun those times were, not how irritated I got when I couldn't get my point across.
What Happens When We Buy Things?
When you buy stuff, your brain isn't able to trick you. You have to stare at the thing you bought. To be clear, buying things does give you short term enjoyment. But, over time that tends to go away. If you buy a new car, or a new television, you get short term enjoyment out of that, but eventually new car models come out, and television technology advances, and you are left with old stuff. You might still get to use it, but you don't get as much enjoyment out of it as you used to.
As an example, if you have a TV that still works fine and you got an unusually large bonus at work and have the choice between buying the latest TV (or car or phone or clothes...whatever), or going on a family vacation, you might have more short term happiness buying the TV, because it's new and fancy. Plus, it was probably stressful hauling your kids everywhere and putting up with their short attention spans. But, over time you will gain much more long term happiness by going on the trip. The TV will get old and the memories of seeing your kids' faces when they saw the ocean or went in the lake for the first time will overpower any negative memories you have.
How Will We Remember Our Trip?
When my wife and I remember this Grand Canyon trip, we're not going to remember all those things that went wrong. Heck, I almost forgot many of those already (we keep notes from our trips so we can go back and read what was going through our minds while we were on the trip). What we are going to remember is the cool people we met, having a couple drinks sitting in the water staying cool, sleeping under the stars, hiking to some of the coolest areas we've ever seen, and jumping off waterfalls. That's how it works.
Words of Caution
I do have to mention, this is not a ticket to recklessly spend. Nobody is telling you to spend your rent money on a vacation because you read a blog post that told you it was worth it. The "experience vs. buy" decision is for money that is free in your budget. Nor am I saying that you should be a minimalist. We need stuff. All I'm saying is that all else equal, you are likely to be happier buying experiences than you will buying stuff.