You may have come across a popular money argument that’s been having a moment lately.
The premise is simple, sensical and even science-backed: Experiences tend to bring us more joy than things do, so the money we spend on doing things is a better investment than what we spend on having things.
Even on an anecdotal level, this wisdom seems to hold true.
Think about it. Do you remember the last time you meandered through the mall and found yourself lusting after some gorgeous pair of boots or new electronic gizmo?
If you caved and bought it, how long did that buyer’s thrill last before it faded, leaving you with yet another thing you don’t frequently think about… and a few hundred less dollars in your pocket?
On the other hand, how vividly do you remember the best concert you’ve ever been to? The best dinner you’ve ever had? Regardless of how much you spent on your favorite vacation, how much would you say it was worth?
In short, the memories you make at that can’t-miss football game might actually end up being worth a whole paycheck to you down the line — whereas the junk you pick up on your treat-yo-self shopping spree probably won’t.
At least, that’s the going theory. And it does seem to be going, especially among the millennial crowd, whose sudden negligence in the new-stuff sector is partially to blame for retailers closing storefronts and even filing for bankruptcy.
Which — sorry, Macy’s — seems all well and good to me. Do you really need another dress or watch or handbag? Live lighter! Buy less! Save your money for traveling and eating amazing food!
How could this possibly go wrong?
Yes, You Could be Overspending on Experiences
Here’s the problem.
Overspending still destroys your budget… even if you’re blowing your savings on music festivals or life-changing backpacking trips to see the world.
… Or tasting every variety of your hometown’s finest craft beer. (We see you, millennials!)
Effective money management is, unfortunately, not as simple as dividing your money-spending options into the categories of “stuff” and “stuff to do.”
Even if money spent on experiences is objectively better-spent — which is debatable — if you can’t afford tickets to Coachella or a meal at every top-rated restaurant in your town, you still can’t afford it.
Let me give you a personal example.
Last year, I wrote (at length!) about how much I regretted taking out a loan on my car.
Sick of facing down that payment every month, I considered selling the dang thing. I did a ton of math and figured out that I was spending over $600 per month just to have a car — and more than half of that was on the loan. Worse yet, a lot of it was going toward interest.
So I vowed to pay it off as soon as humanly possible, making getting out of car debt (which, by an insane stroke of luck, is the only kind I have) my No. 1 financial goal. I’d let nothing get in my way.
… And then I saw a sweet fare sale and decided to take a weeklong trip to Ireland. And spend a couple of weekends hanging loose in Miami. And go hiking in Atlanta. And eat amazing smoked-meat sandwiches in Montreal.
Long story short, I totaled my 2016 travel expenses and found that I spent over $7,000 on various trips. Considering I took more than five vacations last year, that figure isn’t atrocious. (I rely on lots of travel-hacking tips to trot the globe.)
But it’s also more than half of what I still (still. STILL!) owe on my car.
Don’t get me wrong, they were all awesome experiences. But could I really “afford” them? That’s a different question.
Is Spending Money on Experiences Necessarily Better?
Honestly? Excessive experience spending might just be a different spin on the same old impulse buying… well, impulse.
Ever write a wish list full of items you can’t afford right now but are totally going to save up for? Ever have a few items stick to that list for a few weeks or months… only to discover you don’t actually want them that badly and end up foregoing the purchase entirely?
This tactic has saved me a ton of cash on items that would almost certainly have ended up collecting dust at the back of my cabinet or closet — things like a veggie spiralizer, one of those trendy new Polaroid snap cameras and this sloth ring.
Since I quickly forgot about how badly I wanted them as soon as I put them on my list, it makes sense that I’d probably have lost interest in them just as quickly had I actually forked over the cash and bought them.
This mentality can extend to experiences, too. We just call an experiential wish list a different thing. (A “bucket” list, maybe.)
If you don’t give your bucket list items long enough to marinate, you may discover you’re spending beaucoup bucks taking trips and seeing concerts just to check off a box, rather than to actually enjoy the experience.
That means your FOMO can be just as unfulfilling — not to mention detrimental to your finances — as your obsession with designer threads, even if you successfully convince yourself that it’s higher-minded and different because it’s not materialistic.
And acting like you can afford those experiences when you can’t — and ignoring your bank account statements, or overspending and racking up credit card debt in the meantime — isn’t doing you any favors down the line.
So what can you do?
Turn Your FOMO into JOMO
Well, as far as the finances themselves go, there’s no sexy secret. If you want to build a firm financial future, you need to stop overspending, set financial goals, create a budget, become debt-free and prioritize saving money — for your emergency fund and retirement.
Then you can figure out how you want to allot the rest of your money, which includes saving for big purchases like music festivals, vacations or a home.
Luckily, we’ve got tons of resources here at The Penny Hoarder to help you do just that. And all this is not to say you can’t use any of your hard-earned dollars on experiences (or even things, if that’s your thing)!
Getting in control of your finances is all about making your own decisions about what to do with your money. We just want to help you make sure they’re well-informed, non-ruinous decisions you won’t regret five years from now.
So psychologically, how does that work when you’ve got a raging case of FOMO? How do you convince yourself saving money’s worth it in the long run when it means you have to miss out on an expensive experience right now?
Start by switching one letter on that unfortunately catchy acronym we can’t seem to avoid. Instead of fear of missing out, start parsing your slower-paced, money-saving lifestyle as joyful.
That’s right, there is such a thing as JOMO — the joy of missing out.
I promise it’s not just sour grapes. Think about it.
The more carefully you lay out your financial plans, the more time you’ll have to pick which experiences are really the most important to you… and the more money you’ll have to spend on them. That means you’ll be able to enjoy them as fully as possible, sparing few expenses, rather than taking the economy version of your dream trip.
Also — and I say this from experience — you’re much more likely to fully benefit from life-changing, awesome experiences if you leave some negative space between them.
Case in point: Travel? Awesome. Constant travel? Kind of overwhelming.
And if you reach your “overwhelmed” point midway through your second three-week whirlwind tour through Europe, you’re going to get a whole lot less ROI out of those tours and activities you spent so much on. In fact, your dream trip might become something more like a souped-up to-do list, which is a way bigger waste of cash than never having gone in the first place.
It’s kind of like the difference between eating a chocolate truffle or two after dinner and downing a whole box. One is good, so more is better, right?
But as we all discover, while it might seem like a good idea at the time, we enjoy that single truffle way more than the entire box — especially the next morning. Scarcity is part of what makes the best things in life even sweeter.
Give yourself the time you need to make the best of the experiences you spend your hard-earned money on. I promise, they’ll be well worth the wait.
Jamie Cattanach (@jamiecattanach) is a freelance writer whose work has been featured at Ms. Magazine, BUST, Roads & Kingdoms, The Write Life, Nashville Review, Word Riot and elsewhere. She lives in St. Augustine, Florida.