How we experience things and how we remember them can be very different. For example, you took your teenage daughter clothes shopping and got her a whole bunch of things she really liked. At the end, she asked you to buy her a revealing dress and you said ‘no’. As both of you were getting into the car, your daughter angrily accused you of never letting her having what she wanted and she’d never waste her time shopping with you again. What happened to all the cool stuff she’d already got and the laughs you shared before the outburst?

According to Daniel Kahneman, the world’s most influential living psychologist who won the Nobel in Economics for his pioneering work in behavioral economics, our experiencing self and remembering self are two different entities that perceive happiness differently. The experiencing self lives in the present, while the remembering self maintains the stories of our lives. If the doctor asks, “Do you feel any pain in your chest?” he is addressing the experiencing self. When he asks, “How have you been feeling lately?” he is talking to your remembering self.

Research has proven that ending has an important or sometimes dominant effect on how we remember things. For example a fabulous vacation may be remembered as one of the worst experiences if your return flight was delayed and you had to spend the night at the airport and miss an important presentation the next day; a twenty-year marriage a nightmare if the divorce was long and ugly. Kahneman’s remarkable experiment showed that people were more willing to repeat a colposcopy, and uncomfortable procedure in which flexible scope is moved through the colon, even if the procedure was intentionally prolonged for 60 seconds but with a benign ending (as in comparison to the pain peaking at the end).

Does money make both the experiencing and remembering selves happy? Based on research data, people with income below $60,000 a year are unhappy, and they get progressively unhappier the poorer they get. Above that, the line is absolutely flat. “It seems that money doesn’t buy you experiential happiness, but lack of money certainly buys you misery.” In China these days, a lot of girls want to marry rich guys. Their motto is “I’d rather weep behind the wheel of a BMW than laugh riding a bike.” Some of these girls choose to have relationships with married wealthy men while others are married to guys who cheat on them. If they are honest with themselves, their experiencing selves can’t be happier in such unhealthy relationships. However, they think they are better off especially when they look at their possessions or social status and compare them to how ‘little’ they used to have. What a tradeoff!

The correlation between how happy we are in our life and how happy we feel about our life isn’t a strong one, about 0.5. In other words, on a scale of 1 to 10, if someone rates his overall life satisfaction as 8, we don’t really know much about how happy he is from day to day living.

After I read a book, I usually can recall the main ideas but fail to retain most of the details. So I am in the habit of highlighting the interesting parts for future references. The same is true with how our experience and memory work. Most of our experience is ignored by our remembering self. And yet “we don’t choose between experiences, we choose between memories of experiences. Even when we think about the future, we don’t think of our future normally as experiences. We think of our future as anticipated memories.”

This is why we all need a mental highlighter to bring episodes of my daily mundane life to the attention of our remembering self so that it will hold and learn from past experiences and the two combined will tell a coherent story. This requires each of us to slow down and be observant and appreciative of the things and people around us.

Understanding the differences between how we experience the events of our life and how we remember them has profound implications for our self-awareness. Self-understanding is a critical step towards true happiness. So far we know that doing what we love and spend time with the people we like make us truly happy.