Most literature suggests that consumers are happier when they spend their money on experience, rather than material purchases, on the premise that consumers may evaluate material possessions largely on the basis of their functional utility and ability to fulfill basic human needs; experiential consumption reportedly fulfills mainly psychological needs. The present research addresses material purchases that fulfill not only functional but also psychological needs (e.g., status purchase). The results reveal that consumers with high self‐discrepancy are more apt to derive happiness from material status purchases than those with low self‐discrepancy (Experiments 1 and 2); this effect is mediated by the motives for goal pursuit (Experiment 3), as triggered by the desire to narrow the gap between the actual self and an ideal self. Copyright © 2016 John Wiley & Sons, Ltd.