Tammy Stobel and Logam Smith are happier with less clutter in their lives and a small apartment in Oregon. Leah Nash for The New York Times
Downturn's new spending habits show the way to greater satisfaction
As the months passed, out went stacks of sweaters, shoes, books, pots and pans, even the television after a trial separation during which it was relegated to a closet.
Eventually, Tammy Strobel and her husband Logan Smith, both 31, got rid of their cars, too.
Her mother called her crazy.
Today, three years after the couple began downsizing, they live in Portland, Oregon, in a studio with a nice-sized kitchen. They have money to travel and to contribute to the education funds of nieces and nephews. And because their debt is paid off, Ms. Strobel works fewer hours, giving her time to be outdoors, and to volunteer, which she does about four hours a week for a nonprofit outreach program called Living Yoga.
"The idea that you need to go bigger to be happy is false," she says. "I really believe that the acquisition of material goods doesn't bring about happiness."
While Ms. Strobel and her husband overhauled their spending habits before the recession, legions of other consumers have since had to adapt in ways that could ultimately make them happier.
New studies of consumption and happiness show, for instance, that people are happier when they spend money on experiences instead of material objects, when they relish what they plan to buy long before they buy it, and when they stop trying to outdo their neighbors.
While the current round of stinginess may simply be a response to the economic downturn, some analysts say consumers may also be permanently adjusting their spending based on what they've discovered about what truly makes them happy or fulfilled.
"This actually is a topic that hasn't been researched very much until recently," says Elizabeth W. Dunn, an associate professor in the psychology department at the University of British Columbia, who is at the forefront of research on consumption and happiness. "There's massive literature on income and happiness. It's amazing how little there is on how to spend your money."
Studies over the last few decades have shown that money, up to a certain point, makes people happier because it lets them meet basic needs. The latest round of research is, for lack of a better term, all about emotional efficiency: how to reap the most happiness for your dollar.
Vacations, Not Couches
One major finding is that spending money for an experience - concert tickets, French lessons, sushi-rolling classes, a hotel room in Monaco - produces longer-lasting satisfaction than spending money on plain old stuff.
"'It's better to go on a vacation than buy a new couch' is basically the idea," says Professor Dunn.
Jennifer Black, president of the retailing research company Jennifer Black & Associates, said: "I think people are realizing they don't need what they had. They're more interested in creating memories."
While it is unlikely that most consumers will downsize as much as Ms. Strobel did, many have been, well, happily surprised by the pleasures of living a little more simply. The Boston Consulting Group said in a June report that recession anxiety had prompted a "back-to-basics movement," with things like home and family increasing in importance over the last two years, while things like luxury and status have declined.
"There's been an emotional rebirth connected to acquiring things that's really come out of this recession," says Wendy Liebmann, chief executive of WSL Strategic Retail, a marketing consulting firm that works with manufacturers and retailers. "We hear people talking about the desire not to lose that - that connection, the moment, the family, the experience."
Unlike consumption of material goods, spending on leisure and services typically strengthens social bonds, which in turn helps amplify happiness, research suggests.
Paying for experiences also gives us longer-lasting happiness, because we can reminisce about them, researchers say.
That's true for even the most middling of experiences.
That trip to Rome during which you waited in endless lines, broke your camera and argued with your spouse will typically be airbrushed with "rosy recollection," says Sonja Lyubomirsky, a psychology professor at the University of California, Riverside. "Trips aren't all perfect, but we remember them as perfect."
And experiences can't be absorbed at once - it takes more time to adapt to them and engage with them than it does to put on a new leather jacket or turn on that shiny flat-screen TV.
"We buy a new house, we get accustomed to it," says Professor Lyubomirsky, who studies what psychologists call "hedonic adaptation," a phenomenon in which people quickly become used to changes, great or terrible, in order to maintain a stable level of happiness.
Over time, the buzz from a new purchase is pushed toward the emotional norm.
"We stop getting pleasure from it," she says. And then, of course, we buy new things.
Scholars have discovered that one way consumers combat hedonic adaptation is to buy many small pleasures instead of one big one.
Instead of a new Jaguar, Professor Lyubomirsky advises, buy a massage once a week, have lots of fresh flowers delivered and make phone calls to friends in Europe. Instead of a two-week long vacation, take a few three-day weekends.
"We do adapt to the little things," she says, "but because there's so many, it will take longer."
The Joy of Anticipation
Before credit cards and cellphones enabled consumers to have almost anything they wanted at any time, the experience of shopping was richer, says Ms. Liebmann of WSL Strategic Retail. "You saved for it, you anticipated it," she says.
In other words, waiting for something and working hard to get it made it feel more valuable and more stimulating.
Once upon a time, with roots that go back to medieval marketplaces featuring stalls that functioned as stores, shopping offered a way to connect socially, as Ms. Liebmann and others have pointed out. But over the last decade, retailing came to be about one thing: unbridled acquisition, epitomized by big discount stores where the mantra was "stack 'em high and let 'em fly" and online transactions that required no social interaction at all.
The recession, however, may force retailers to become reacquainted with shopping's historical roots.
"I think there's a real opportunity in retail to be able to romance the experience again," says Ms. Liebmann. "Retailers are going to have to work very hard to create that emotional feeling again. And it can't just be, 'Here's another thing to buy.' It has to have a real sense of experience to it."
Industry professionals say they have difficulty identifying any retailer that is managing to do this well today, with one notable exception: Apple, which offers an interactive retail experience, including classes.
Marie Driscoll, head of the retailing group at Standard & Poor's, says chains have to adapt to new consumer preferences by offering better service, special events and access to designers.
Cycle of One-Upmanship
For the last four years, Roko Belic, a Los Angeles filmmaker, has been traveling the world making a documentary called "Happy." Since beginning work on the film, he has moved to a beach in Malibu from his house in the San Francisco suburbs.
San Francisco was nice, but he couldn't surf there.
"I moved to a trailer park," says Mr. Belic, "which is the first real community that I've lived in in my life."
Now he surfs three or four times a week.
"It definitely has made me happier," he says. "The things we are trained to think make us happy, like having a new car every couple of years and buying the latest fashions, don't make us happy."
Mr. Belic says his documentary shows that "the one single trait that's common among every single person who is happy is strong relationships."
Buying luxury goods, conversely, tends to be an endless cycle of one-upmanship. A study published in June in Psychological Science found that wealth interfered with people's ability to savor positive experiences.
Of course, some fashion lovers beg to differ. For a certain segment of the population, clothes are an art form, a means of self-expression.
Hayley Corwick, who writes the popular fashion blog Madison Avenue Spy, says: Some days, you want a trip; other days, you want a Tom Ford handbag.
Ms. Strobel now writes about her own life choices at Rowdykittens.com.
"My lifestyle now would not be possible if I still had a huge two-bedroom apartment filled to the gills with stuff, two cars, and 30 grand in debt," she says.
"Give away some of your stuff. See how it feels."
The New York Times
(China Daily 08/15/2010 page9)