There’s a fair amount of chatter on social media and articles being written about how life is about experiences and not stuff. I couldn’t agree more and I’ve written about it before. There was a great article in the New York Times about it just a few weeks ago.

The essence of the article and much of the current thinking on happiness is that happiness is tied to experiences (as well as other things like relationships, purpose, etc.) not things or objects. Buying another object won’t make you happy, but having a great life experience just might. Both objects and experiences usually cost money and the more life-changing either is, generally (and I know there are exceptions) the more money either costs.

The argument goes: “spend it and don’t worry about saving because you are adding to your life experience and that’s more important than some number on some account somewhere.”

My position goes: Yes, once you are savings secure, you can decide if you want to spend that extra dollar on an experience or on growing your savings more (I would probably vote for the experience personally!). If you spend on experiences before you are savings secure, you could be risking credit card debt or even financial ruin.

People should have experiential goals and they may even help you keep your focus as you get saving’s secure so you can spend your NEXT bonus on climbing Everest. Here’s what savings secure looks like:

  1. spend less than you earn each month consistently
  2. have a few thousand set aside for Rainy Day expenses like home or car repairs, root canals and emergency travel
  3. have 3-6 months of your total monthly expenses saved in cash/money markets for a total loss of income
  4. save 15% of your pretax income (including employer matches) for retirement
  5. save monthly or have enough annual income (bonuses, tax refunds, etc.) to pay for your Annual Needs like camp and vacations.

Once all that is in place, any dollar over that amount can and should be spent on experiences and other goals like saving for college or a home renovation. Bottom line, you can’t have financial goals, whether they are experiences, new cars or college, until your are savings secure. Until numbers 1 through 5 above are complete, your only financial goal should be getting them completed.

I know everyone needs to blow of steam and that’s why everyone needs some fun money each month and money put aside for vacations each year.”Experiences,” within the amount you have for fun money each month or vacations each year, is great. Additional experiences, require savings security. Besides, how much fun is white water rafting when are freaking out that you can’t really afford the trip.

Goal 1: Savings Security. Goal 2: All the life has to offer.