Many of us grow up learning the importance of “ipon” or saving, which is typically associated with the dream of owning a home or providing a secure future for children.
This mindset has been deeply ingrained in us and is often reinforced by financial advice from so-called experts in social media, who frequently emphasize that sacrifice and saving are the foundation of a stable future.
When we consult a financial advisor, the standard advice we usually hear is straightforward — save diligently, invest wisely and leave a nest egg for your retirement and heirs.
This approach, while admirable, has its downsides. Many of us defer personal dreams—whether it’s travel, hobbies or pursuing passion projects—in favor of security. As a result, we live lives heavily focused on delayed gratification, where happiness is often postponed to “someday.”
According to Bill Perkins, best-selling author of the book, Die with Zero, the ultimate goal of saving should not be to accumulate wealth for the sake of leaving it behind, but to maximize life experiences while we are still able to enjoy them.
One of Perkins’ key arguments is that delaying the enjoyment of your money diminishes its value. Imagine you dream of traveling the world but decide to wait until you’ve “saved enough.”
The problem with this approach is that, by the time you reach your 60s, your dream of traveling may be less enjoyable, or even impossible, due to health limitations.
Perkins further explains that when we invest in meaningful experiences, we earn emotional returns, which he calls “memory dividends,” that give lasting joys and connections. These experiences are far more valuable than the mere accumulation of wealth.
Research by Dr. Thomas Gilovich, a psychology professor at Cornell University, reinforces this idea. In his studies, Gilovich found that people tend to derive more lasting happiness from experiences, like travel or shared moments with loved ones, than from material possessions.
Experiences become part of our identity, and as time passes, they are often cherished as memories, while material things lose their appeal.
Another study by Prof. Elizabeth Dunn and Dr. Michael Norton from Harvard Business School further supports this observation. They found that people gain more long-term satisfaction from experiences than purchasing material goods. The joy derived from travel, socializing, or dining out is often enhanced by shared memories, social connections, and the positive emotions linked to those moments.
The idea of prioritizing meaningful experiences over material wealth changes our perspective on how we use our money. Instead of evaluating expenses purely based on their cost, we should begin to see them as investments in memories, relationships and personal fulfillment.
This approach recognizes that the value of an experience extends far beyond the moment. For example, a trip to Palawan with family is not merely a one-time expense. It is an investment that creates stories and bonds, which provide joyful memories for years to come.
Similarly, if you travel frequently, taking a business class flight once in a while is not simply a higher upfront cost. It is an investment in comfort and added luxury, which enhances your journey by making it more memorable.
Likewise, if you enjoy eating out, dining at a luxury restaurant occasionally is not just an expensive meal. It’s an opportunity to experience fine dining, explore different cuisines, and create unforgettable moments with loved ones. These experiences, though costly in the moment, leave lasting memories that enrich life.
The belief that money should be used to enhance one’s quality of life, rather than being saved to pass down as an inheritance, challenges traditional saving habits. No matter your financial situation, here are some reflections to consider this holiday season.
- Prioritize experiences over accumulation. Whether it’s indulging in a fine dining experience, taking a spontaneous weekend getaway or attending a special event, make sure to spend on moments that offer emotional rewards.
- Rethink retirement. In the Philippines, retirement is often viewed as a time to enjoy life’s pleasures after years of hard work. However, enjoyment should be spread throughout life, not postponed until later years. It’s important to find a balance between ensuring financial security and making the most of the opportunities we have right now.
- Help while alive. We often focus on leaving an inheritance for our loved ones, because we believe that it is our way to secure their future. But, why wait until after we’re gone to make a difference?
Providing support while it matters most can have an immediate and lasting impact. By offering help now, we can make a tangible difference in the lives of our loved ones, rather than waiting for a time when the inheritance may be less impactful.
- Redefine financial success. Success isn’t about the size of your bank account when you die; it’s about the quality of your life. A person who has seen the world, built strong relationships, and followed their passions has truly lived richly. The value of wealth lies not in leaving behind large sums of money, but in how it is spent to create memories that will last a lifetime.
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Henry Ong is a Registered Financial Planner of RFP Philippines. Stock data and tools provided by First Metro Securities. To learn more about investment planning, attend the 109th batch of RFP Program this January 2025. To register, e-mail info@rfp.ph