Money Well Spent: Vacations
A couple weeks ago I wrote a piece on four things worth splurging on. Now make that five.
The New York Times recently highlighted the ways consumers are becoming far more calculated in the ways they direct their spending, preferring purchases with emotional gratification. Take this excerpt:
"... Consumers have gravitated more toward experiences than possessions over the last couple of years, opting to use their extra cash for nights at home with family, watching movies and playing games -- or for 'staycations' in the backyard. Many retailing professionals think this is not a fad, but rather 'the new normal.'"
The article references a recent study by Thomas DeLeire, an associate professor of public affairs, population, health and economics at the University of Wisconsin in Madison, which examined nine major categories of consumption. The only one that led to happiness? Leisure spending.
I looked up the report and indeed, DeLeire's research shows that a $10,000 increase in spending on leisure goods is associated with a 0.17-point increase in life satisfaction. (I am only spending a fraction of that to visit Maine next week, but I suspect I too will experience "life satisfaction.")
A $20,000 increase in leisure spending is "roughly equal to the happiness boost one gets from being married," the report says.
Other spending categories in DeLeire's test included: durable goods, charity and gifts, personal care and clothing, health care, food at home, food out, utilities and housing, and vehicles. They all turned out to be unrelated to happiness. (Although please don't take this as an excuse to stop paying for health insurance.)
The reason? Leisure spending equates to happiness because it has a social component, which helps to reduce the feeling of loneliness, the report concludes. In short, we feel "socially connected" and that boosts happiness. So, I suppose that makes Facebook the ultimate social activity/staycation?
To learn more about how you can save money this summer doing leisurely activities, check out my tips for dining, travel and more. And if you're traveling with a group, learn how to avoid sticky money situations here.
Photo courtesy Blakespot's photostream on Flickr