If you think money can’t buy happiness, maybe you’re not spending it right. We all have our own definitions of what happiness means and what are the things that make us happy. Usually, social connections and conversations are good for our happiness because it gives us comfort. These can be created through tons of methods, even by giving money to others. Research show that spending money on others yields more happiness than spending it on yourself.
Happy Money: The Science of Smarter Spending is a scientific research made by Elizabeth Dunn and Michael Norton (Harvard Business School) that shows us how to stop the never-ending quest reaching higher and higher to make more and more money in search of happiness. It teaches us to shift our focus from earning more to spending differently.
The key lies in following five key principles: Buy Experiences (research shows that material purchases are less satisfying than vacations or concerts); Make it a Treat (limiting access to our favorite things will make us keep appreciating them); Buy Time (focusing on time over money yields wiser purchases); Pay Now, Consume Later (delayed consumption leads to increased enjoyment); and Invest in Others (spending money on other people makes us happier than spending it on ourselves).
“We’ve shown in our research that giving money to others actually does make people happier,” says Norton, an associate professor of marketing at Harvard Business School. “One of the reasons is that it creates social connections. If you have a nice car and a big house on an island by yourself, you’re not going to be happy because we need people to be happy. But by giving to another person, you’re…creating a connection and a conversation with that person, and those things are really good for happiness.”
This research has been put into practice in this video that shows how the women in Harvard Square chose to invest in others—and whether it made them happier.
Written by Ana-Maria Gulin