There has been a trend in personal finance blogosphere to discourage spending in consumer products and instead increase the experience fund. Many bloggers justify these experiences while talking down on the goods. This is often seen in the minimalist culture. Don’t get me wrong, I’m on the experience side myself and would rather not buy crappy goods. From a financial standpoint however buying experiences such as travelling are the same as buying consumer goods.
Both of them are a sunk cost
There is no investment in experiences or consumer goods. Sure, many consumer goods can be seen as wasteful and short lived while travelling will give you a lifetime memory. An experience does not give you a return on your investment. You only get a memory and maybe pictures, not a check. The decision to spend on an experience expense or a consumer good is personal, but it is still an expense. There is no right or wrong way to spend on these costs.
The real question you should be asking yourself is how much do you want to spend on these discretionary expenses. When you do your budget, make sure you give yourself some discretionary budget to live life. How much you give yourself depends on your debt obligations, income and goals.
How to spend discretionary
When I was repaying my student loans aggressively, I had no discretionary expenses. No new toys and certainly no travel. Now that my loans are paid off and I have invested heavily in rental properties, I give myself $500/month for my discretionary expenses. One third goes towards travel while the rest goes to gifts, social obligations, personal care and unexpected expenses. I choose experiences over consumer goods since I like to live my life outside of my nest. Mr Cannes on the other hand rejoices from spending on new electronic toys and cozy furniture. That suits him just fine as he likes to live life at home.