Money CAN Buy Happiness

I recently re-discovered a fabulous article originally published by Harvard Business School’s Working Knowledge site, way back in June.  It’s a research-based report on the concept of spending and Happiness.
Selected excerpts from the article:
Can money buy you happiness? Yes—so long as you spend the money on someone else. According to new research, giving other people even as little as $5 can lead to increased well-being for the giver.
That’s the insight into the secret of happiness by HBS professor Michael Norton and two colleagues from the University of British Columbia….
“Intentional activities—practices in which people actively and effortfully choose to engage—may represent a promising route to lasting happiness. Supporting this premise, our work demonstrates that how people choose to spend their money is at least as important as how much money they make,” the researchers explain.
“Our findings suggest that very minor alterations in spending allocations—as little as $5 in our final study—may be sufficient to produce non-trivial gains in happiness on a given day.”
According to researcher Michael Norton: “one of the most puzzling paradoxes in social science is that though people spend so much of their time trying to make more money, having more money doesn’t seem to make them that much happier. My colleagues Liz Dunn and Lara Aknin—both at the University of British Columbia—and I wondered if the issue was not that money couldn’t buy happiness but that people simply weren’t spending it in the right way to make themselves happier. Liz had the great idea to explore whether, if we encouraged people to spend money in different ways, we could uncover the domains in which money might lead to happiness. We conducted a number of studies—from national surveys to a field study in which we examined how the manner in which employees at a Boston-based company spent a profit-sharing bonus impacted their long-term happiness—in which we showed that money can buy happiness, when people spend that money prosocially on others (giving gifts to friends, donating to charities) rather than on themselves (buying flat-screen televisions).
View the complete article here: Spending On Happiness
During the lead-up to the 2008 holidays, one of the consistent themes I saw in my professional circle was the notion of making a donation to a community cause rather than spending $$ on holiday parties.  This research explains WHY this notion is so appealing.  When we spend our money AND believe we are making a difference for someone else, we get a little burst of happiness.
I think this also explains why people who just spend $$ on gifting to “impress” others often find gift-giving to be a real downer.  When the goal is to impress and “out-gift” others in a “keep up with the Joneses” sort of holiday competition, there’s not a lot of space for joy.
But when one takes the time to select a gift that they know the other will truly appreciate, use, get joy from… well, then the giving is a lot more fun.
Just yesterday,  I bought a last minute gift at the grocery store (of all places), and it cost me less than four bucks.  It happened to be a favorite snack of my dying-of-cancer aunt, which I’d learned was difficult to find on the other side of town.  I lucked out in noticing it on the shelf, bought it, and gifted it “just because.”  I think I got more joy from picking up that little gift than from all the $$ I spent on others.
Our intention — our knowing that we are ‘making a difference for someone else’ — is what really creates our Happiness.
May all of my readers experience the Joy of giving this holiday!