American consumers are finally getting the message.
In the hunt for happiness, many have shifted away from material things and toward experiences, trend watchers say. This shift spans the generations, although millennials seem to be further along: Some 76% of millennials, compared with 59% of boomers, said they would rather spend on experiences than on material things, according to new research from Eventbrite, a ticketing company.
From the start of their working years, millennials have placed a high value on job satisfaction and enriching experiences -- to the point of turning down offers or promotions that might get in the way. Some 94% of millennials say experiences are an important part of a fulfilling life, according to the survey.
This thinking runs counter to everything most boomers believed while building their careers. For decades, boomers agreed to relocate to get ahead, and they fashioned their social life around the office. Now, to a large degree that thinking has faded.
Now that boomers are older and have more time on their hands, about 91% agree that experiences are what count, Eventbrite found. (Although boomers aren't putting their money where their mouth is: Despite their greater wealth, they spend less on experiences -- $640 a year, on average -- than the $803 millennials spend annually.)
So when did our culture shift? When did U.S consumers start to embrace relationships, concerts, and travel as a substitute for BMWs and McMansions?
Greed Isn't So Good
The turning point is difficult to identify. But British trend forecaster James Wallman suggests that what he calls “stuffocation” may have peaked with Gordon Gekko’s "greed is good" speech in the movie Wall Street (released in 1987, when the oldest millennials were largely kindergartners). By Wallman’s calculations, 80% of people could be called materialistic in the 1970s, a figure that has dropped to 50% today.
Cornell psychology professor Thomas Gilovich first noted the trend in 2003, a few years after the bubble burst in Internet stocks and took a big toll on the finances of a relatively small part of the population. The shift became unmistakable in the wake of the 2008 meltdown, when the things that many people coveted became unaffordable -- and they rediscovered the simple pleasure of a walk in the park with friends.
I chronicled our shifting values at the time in a 2009 story for Money. Numerous supporting surveys have surfaced in following years.
Yet this shift is not merely about what’s affordable. Something bigger is at work; it was underway before the recession and remains visible well after.
Better Way to Buy Happiness
Leading psychologists have concluded (and personal finance experts have echoed the message) that purchasing experiences is more rewarding -- and makes us happier -- than purchasing things, for a variety of reasons.
Experiences are more fun to look forward to and recall years later. Even a bad experience is memorable and provides perspective. One experience cannot be judged quantitatively against another -- unlike, say, the car you drive -- so there is less status anxiety. Experiences are usually shared; they bring a closer connection.
Millennials seem to have grasped all this at birth, and had it reinforced during the financial crisis, when they saw adults losing their careers, homes, and life savings. And while boomers have endured a long journey, they seem to have arrived at about the same place.
Indeed, the two generations have more in common than either might believe. A landmark 2013 PwC workplace survey found that “the similarities in attitudes across generations are striking.” More than 60% in both generations agree that work interferes with their personal life. Both generations highly value things like flexible hours, job sharing and telecommuting.
A Money survey of couples this spring also found that millennials and boomers are on the same page in a wide range of financial issues, including a need for work-life balance, saving, and jointly setting goals and priorities.
The generations still have plenty of differences. But the focus on experiences over material things appears widely shared -- and may be the key to genuine happiness.