The Value of Memories
It is very hard to quantify the value you will get from making a memory. Yet that doesn’t stop us from pursuing them. Since COVID we have shifted to a more experience-driven (memory-building) spending culture. During the pandemic we were trapped with our belongings and that didn’t bring us that much joy. We did the same thing day after day confined to our homes. After the restrictions lifted, people wanted to get out and we saw a surge of “revenge travel.”
When people are looking to buy an experience they are probably thinking of what they would like to do (relax on the beach, feel the thrill of skydiving, see their kids go to Disneyland, fill in the blank). Sometimes you consider creating a memory as part of your desire to have an experience. You may want to take your kids to Yosemite because you went their as a kid and it was majestic.
Over Thanksgiving I made a realization that the value of making new memories decrease over time, while the memories you have increase in value.
How did I come to this conclusion?
For more than 20 years my extended family meets up for a week during Thanksgiving. We do all sort of things like walk along the beach, play soccer, eat dinner, but over the years we have done fewer new experiences. Instead, we spend more time discussing our memories from previous years rather than spending as much time making new ones. However, when you start having children it interrupts this pattern as you begin to want to make memories with them as well to give them memories to look back on.
So What Should You Do?
A new memory will only serve us from now until our demise, so over time a new experience becomes less valuable over the long-term. So are we to spend all our money memory-making-maxxing? I’d say no, but you should stop being so miserly otherwise you may not get to have the experiences you desired. I remember in college I wanted to study abroad in Korea, but figured I could just travel there later after college and spend less money doing so. Well, after college I was focused on finding a job and then life started moving fast. Despite taking three semesters of Korean I now know virtually none.
Your money certainly has an opportunity cost as that money could grow to much more later. Spending $10k on a family Disney vacation could have been invested and turn into $30k when your kid is ready for college. Sadly I don’t have a formula to offer you as to when to spend the money and when to save it. Suze Orman would probably say save it. Others would say YOLO. Good luck finding your balance. Now go make a memory!