Achieving financial independence and being smart with your money is all about making sacrifices.  Most of us aren’t millionaires so we know that we have to prioritize certain needs and wants.  What one person prioritizes though might be completely different than another person.  Living life to its fullest can get expensive pretty fast so it’s important to know how to spend your money wisely.

Some of us enjoy spending money on nice cars and places to live, others prefer buying the latest electronics and gadgets.  While I definitely like doing all of the above, there’s one thing I cherish more: experiences.  I know it sounds kind of lame to admit that but I’ve had some great experiences traveling the world and even locally here at home.

Here’s a top ten of list of reasons why you should prefer experiences over having more stuff:

1.  A lot of experiences can be free

Think about all the street performances, fairs and so forth that happen every day in your city.  It’s up to you to take advantage of everything your area has to offer.

 

2.  Stuff doesn’t make you happy

No study that I’m aware of has ever shown that the more things you own, the happier you’ll be.  In fact, I tend to see the opposite.  Minimalism or as I like to call it, getting rid of all your crap, is making a huge comeback these days.

 

3.  Spend money on relationships

I’m not arguing that you shouldn’t ever spend money, but try and spend money on things that build relationships: try out events like concerts with friends, camping or dinner with family and friends.  You probably won’t remember the food or the music as much as you’ll remember how much fun you had with the people you went with.

 

4.  Experiences last longer

The latest iPhone will no longer be the latest iPhone in 6 months or so but you’ll always remember the trips you took or the places you visited.  A 2 week vacation might only last for two weeks but the pictures and memories will always be something that you can look back on.

 

5.  Buying stuff leads to one-upmanship

Have you ever noticed how some people always have to have the latest and greatest gadget and they make sure to tell you about it?  These people are classic one-uppers.  They get into a cycle of buying luxury goods just because their neighbor is doing so and not necessarily because it makes them happy.

 

6.  Extra cash makes life a little easier

Money won’t buy you happiness but it can definitely make things a little bit easier.  If you’re not spending oodles every month on the latest consumer goods, you’ll have more money to spend on the things that matter.

 

7.  It feels good to get out there

Sitting on the couch and playing with your Xbox or watching TV on a Friday night isn’t all that fun for most people.  Why not go out and socialize with friends or experience everything the city has to offer?

 

8.  Shopping is too easy now a days

Have you ever had to wait a couple weeks, or even months before getting that thing you really wanted?  It’s a great feeling to save up for something and then finally have the money to go buy it.  Anticipation tends to make us enjoy our purchases more.

But today’s world is all about instant gratification.  I probably sound like a grandpa here, but cell-phones, credit cards and ordering online have made it too easy to get what we want.  I can have a new bike ordered and delivered in less than a day if I wanted to.

 

9.  It’s Science!

Thomas DeLeire, an associate professor at UW-Madison recently published a paper in which he examined major categories of consumption.  The only one he found to have a positive correlation with happiness was leisure: vacation, entertainment and sports.  Spending money on leisure activities appears to make people less lonely and increases their interactions with others.

 

10.  Millionaires don’t live high consumption lifestyles

When you think of the average millionaire, do you imagine a well dressed man or woman in a nice foreign car or do you picture someone dressed in jeans and a t-shirt driving a moderately priced 4 door sedan?  Most millionaires, defined by having one million dollars or more in assets, tend to resemble the latter.  As it might imply, a high consumption lifestyle requires you to spend a lot of money instead of saving it.

 

By Harry Campbell is an aerospace engineer by day and personal finance blogger by night.  On his site Your PF Pro, he talks about everything from saving money at Chipotle to planning for retirement and achieving financial independence. You can connect with Harry on G+, Twitter or his other lifestyle site.