According to a new study, we're happier when we spend money on experiences rather than possessions. The reason: "Experiential purchases"—like a meal in a restaurant, theater tickets, or a vacation—satisfy our need for social connectedness and make us feel more alive, says San Francisco State University psychologist Ryan Howell, who worked on the study with graduate student Graham Hill. Their results also show that the experiences make us happier regardless of how much we spend on them or how much our income is—and since we're left with long-lasting positive memories that we "don't tend to get bored of," says Howell, they lead to long-term satisfaction.
The findings were presented earlier this month at the Society for Personality and Social Psychology annual meeting. —Heather Wax