Money Can Buy Happiness, After All, as Long as You Don't Spend it on Yourself

"Money can't buy happiness," is probably one of the oldest adages in history, right behind the Golden Rule ("He who has the gold makes the rules"). It turns out that money can buy happiness, however -- provided you spend it on the right things. Elizabeth Dunn, a social psychologist and assistant professor at the University of British Columbia, and Michael Norton, a psychologist and assistant professor at Harvard Business School, told Drake Bennett at The Boston Globe that people get more happiness for their buck if they spend it on experiences rather than material goods. Spending the money to share experiences with other people -- “prosocial spending” -- is especially rewarding in terms of generating happiness, they said.

In 2008, Dunn and Norton surveyed 632 Americans and found that those who donated money to charity or bought gifts for other people were happier than those who bought things for themselves. To make sure that there was cause-and-effect in play, they ran another test in which they gave people between five and ten dollars and told them to either spend it on themselves (paying a bill or buying a gift for themselves) or on someone else (in the form of a gift or charity). The researchers found that people who spent the money charitably reported being "significantly happier than those who had spent the money on their own needs."

Mark Frauenfelder – Editor-in-chief of MAKE magazine and the founder of the popular Boing Boing weblog, Mark was an editor at Wired from 1993-1998 and is the founding editor of Wired Online.

Comments

[Frank Fitton]

Psychologists have confirmed what a lot of us non big time savers have been saying for years, splurging is good for your mental health. They also agree that splurging on other people is one of the ways to maximize the happiness you get out of it.

I think the occasional splurge will help you lead a happy life. That will in turn make you a more productive worker, which SHOULD result in making more money.

Check out my blog about how splurging is a good thing at.... http://www.thedebtgazette.com/2009/08/occassional-splurge-good/

[Nick]

Hi,

interesting thoughts!

I believe that it’s not possible to make a general statement on whether money makes people more or less happy. Money comes with a whole set of new elements that may have good or bad impact on our happiness, and depending on how susceptible we are to every one of them, the conclusion will go one way or the other (i.e. different from person to person).

I recently made an effort to provide a more comprehensive picture of what these ad- and disadvantages are. I invite you to have a look at http://www.spreadinghappiness.org/2009/08/money-how-much-should-we-strive-for-it-to-become-happy/ and tell me what you think!

Thank you,

Nick

[Leeroy Glinchy]

This is so true. I feed the homeless once every two weeks. Each time, I think it's a pain to prepare food and rush to the temple on time. When I get out on the streets, I am so happy. I seem to forget about this each time, though. Strange effect. I wonder why people aren't more generous when it works.

[croalx]

the only thing i can say is make peace with your mind :)
live and don't listen to anyone that's it .
easy easy .

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They also agree that splurging on other people is one of the ways to maximize the happiness you get out of it.