In the last week before Christmas, the pressure is on to find the "perfect" gift for our loved ones, friends, and colleagues. After the madness of Black Friday and Cyber Monday, it can be a challenge to find the "it" gift of the year (the newest gaming station or tech gadget or the hottest toy of the season).
So how do we find a gift that is meaningful and special?
As documented by Adam Grant in his best seller Give and Take, we often make the wrong choices for gifts, which tend to match our own preferences rather than those who receive them. For example, in one powerful study which looked at gifts on wedding registries, wedding guests preferred to give gifts that were not on the list, as they wanted to give the couple something 'unique' or 'personal.' However, when the couple was asked to rate the desirability of the different items, the gifts on the registry won out. This is not especially surprising when we think about it, because it was their desirability that led these items to appear on the list in the first place. So it makes sense that they would be rated as better gifts by the couple. Unfortunately, it is our own desire to be different and think about what would be meaningful to us that leads to an attractive, yet incorrect choice.
This leads to incredible frustration and exasperation when trying to find something that the recipient will appreciate. Fortunately, social science may be shedding some light on how to answer this question.
1) Buy the gift of experience
A series of studies documented that a powerful way to enhance our happiness through spending money relates to providing experiential rather than material gifts. In an ingenious study aptly named "To do or to have? That is the question," Leaf Van Boven and Thomas Gilovich found that while 57 percent of Americans reported that experiential purchases made them happier than material purchases, only roughly one-third rated material things more highly.
In another revealing study, which examined how older Americans (e.g., more than 50 years of age) spend their money, the results were very clear. 'Leisure' purchases, which consisted of travel, sporting events, movies, etc., were one of the strongest predictors of well-being.
So, when you are thinking about that special gift that will make you stand out from the rest, give the gift of experience.
2) You don't have to break the bank
Many people may make the faulty assumption that to provide a meaningful experiential gift you will need to spend lots of money. To the contrary; another fascinating study that built on the work by Van Boven and Gilovich research looked at purchases of approximately $3. Once again, the relationship held up. In other words, with this very limited budget, people who had $3 experiences (e.g., buying and listening to music, playing a video game) scored significantly higher in terms of their happiness than those who were given material possessions of the same value. Your budgetary limit will not impede the impact of the gift.
3) To make it truly special, buy a shared experience
The common theme that runs through all of the above experiments is the increased social connectedness that these experiences provide. Not surprisingly, as a result of the shared joy that comes along with experience, it is truly the gift that can keep on giving, for the giver and the recipient. So wherever possible, invest in an experience that the recipient can share with either you or another person.
There are several reasons why buying the gift of experience exceeds the value of an object. First, the elevated happiness that comes from the opportunity is prolonged. Experiences also tend to get better with age. Think about the types of stories you tell when you are at parties or meeting someone for the first time. Do you talk about your first house? Your favourite car? Your best suit? No, we happily recount the memories created from an experience, most often those we have shared with the people we love.
4) Pay it forward
Another interesting finding is that spending money on others actually increases our own well-being as well. In fact, spending as little as $5 on someone else has been shown to boost our happiness. Although many of us focus on what we will receive during the holiday, when we reflect on what we have, the vast majority of us likely don't need more "stuff".
This season, ask one/some of your gift-givers to make a charitable donation on your behalf. Another option is kiva.org, a non-profit organization whose mission is to provide microloans to entrepreneurs around the world to alleviate poverty. For as little as $25, you can assist someone who wants to launch a business in their home country.
This holiday season, the secret to giving the perfect gift is right in front of us. When considering your 'present of choice,' move beyond the material realm and think about the experiences you can share with the people closest to you. It is something that will have the impact you desire, both now, and in years to come. What better gift to give than the gift of happiness, theirs and your own.
Think about the gifts that you have received or given. What are your favourite gifts to receive? What are your favourite gifts to give? When you think about your happiest moments, were they experiential or material?
All the best and happy spending!