Shocking Truth that Money CAN make You Happy

I enjoyed reading Happy Money: The Science of Smarter Spendingby Elizabeth Dunn and Michael Norton. It is very light and accessible, and full of good natured humor.  In their book, Dunn and Norton share 5 simple guidelines to receive more enjoyment and satisfaction for your hard-earned dollars.

Buy Experiences

First of all, we should buy experiences instead of things! We are prone to feel that acquiring things will make us happy but Dunn and Norton report on the many studies that show that it is experiences that we are more likely to receive happiness from. If an experience is particularly dificult we are even more likely to find it increases our happiness.

Make it a Treat

Just as we become acclimated to the smell of the air freshener in our home, our happiness declines with each successive dose of whatever it is that gives us joy. When we ration out our enjoyments we are more likely to gather the greatest satisfaction from them. This is related to the odd behavior that many long time residents of London have never visited some of the local landmarks that most people visit when in England for only a week or two. When we expect something to be around for a while, we do not feel the need to take advantage of it. “Seize the Day” seems to be the appropriate motto, whereby we make a treat of something that would otherwise seem always available.

Buy Time

While this chapter was complicated, that bottom line is that where we can gain time by spending the extra money (by purchasing a roomba to do our vacuuming or by spending more on gasoline at a conveniently local, but slightly more expensive station), we will experience more happiness.

This gets more complicated depending on how we decided to spend the extra time. If we decide to spend the extra time watching excessive television we are not going to receive much happiness. Some television can be enjoyable, but the benefits diminish with the time spent. Also, If we spend more time at the office to pay for the grand home that we bought to benefit our family, we will find that we might have been better served by choosing a  more modest home that would allow us to spend more time in socializing with family and friends.

Furthermore, thinking in terms of time, instead of money makes us more likely to socialize with others and enjoy the moment, rather than think we should be doing something else that is more worthwhile.

Pay Now, Consume Later

Dunn and Norton remind us of the satisfaction we feel as we anticipate and prepare for a future vacation, or the purchase of a luxury item. The feeling we have as we imagine ourselves enjoying the coveted item or experience is partly due to the fact that the future is at best cloudy. We can fashion our own experience and savor it, until we actually arrive at that future and find that is might be less than we had anticipated.

The authors share a number of studies that show how our thinking is biased toward things in the present, and biased against future events. We think that we will happier if we get something now, when the actual experience is the same regardless of when we receive it, and we thus can append all the pleasurable anticipation that we would not otherwise have experienced. Where possible we can improve our satisfaction by paying first and delaying consumption.

Invest in Others

Lastly, we are happier when we give to others. In a study two groups of people were asked to participate in an experiment. If willing they were given an envelope which contained a $5 bill and instructions on how to proceed, they were also asked their current level of happiness on a sliding scale. Some received $20 instead of $5. Half the people were instructed to spend the money on themselves and half were to spend it on someone else or give it to charity. Later in the day they were contacted and asked how they felt in general, and what they had done with their money. The results showed that the amount of money did not significantly change their happiness. However those that used the money to benefit others were much more happy than those that spent it on themselves.

Dunn and Norton go further and specify that the biggest happiness bang for our prosocial buck is achieved when we have take advantage of three strategies:

  • Make it a Choice – we contribute of our own accord, not when pressured by others
  • Make a Connection – we make a personal connection with the recipient (think serving in a soup kitchen)
  • Make an Impact – we choose a cause where we can see the clear benefit that the donation provides.

Beyond the benefits in satisfaction, people who spend time to benefit others feel that they have more time. We are also healthier when we give to others.

I encourage you to buy or borrow Happy Money: The Science of Smarter Spending(follow the link to or buy whatever book captures your fancy. Thanks to all that visit  Amazon through my affiliate link, your purchases help support this blog.

Please leave a comment and share how you get the most happiness benefit from your dollars spent!


Avoid these willpower mistakes

I was pleased when I found The Willpower Instinct: How Self-Control Works, Why It Matters, and What You Can Do to Get More of It, by Kelly McGonigal. There has been a plethora of books about the science of willpower with this book brings us up to date with the state of the art.

This book was created from a popular course that Kelly taught at Stanford University. There is so much useful information here that I will only touch upon only a few points

Maintain your Willpower Energy

Kelly explains that self control is like a muscle, and as such can be built up, but also can be exhausted. Will power is based in the higher functions of the brain, so if our glucose levels are in decline, so does our ability to exercise will power. I think this is one of the reasons we should not go grocery shopping hungry. Maybe all we need is a healthy snack or drink. our body does know if we are drinking a real energy source or a diet drink that does not provide real energy.

We should also realize that this weakness is a mental limitation and not a physical one. Can we train ourselves to push through this weakness and exercise control. By understanding this book we can be more aware of when we are weakened.

Focus on our Good Goals, not the “Goodness” of Our Actions.

Studies have found that we want to feel good about ourselves. If we feel good about an action we have taken, we are more likely to make a bad decision immediately after. We feel good about ordering a healthy salad, so we finish it up with a fat filled dessert.

In a reported study a group of people was asked to indicate whether they agreed or disagreed with a pair of discriminatory statements. Another group did the same for a pair of pretty neutral statements.  Both groups were then asked to choose between a male or a female candidate to fill an executive position in a traditionally male industry.

The study found that those individuals that had the opportunity to object to a sexist statement were more likely to discriminate against the female candidate.

The bottom line is to focus on why we were good (to achieve our goal) rather than on the “goodness” of our actions.

Train Ourselves to Recognize Real Happiness

If you are like me, you have heard about societies where people have very little of the niceties of life that we have, yet they are very happy. We are a victim of years of advertising that tells us how happy we will be only when we have acquired the latest toy or trinket. We have to recognize that the promise of reward can be very enticing and yet will lead to regret and remorse (think Las Vegas).

Leverage those experiences that get your dopamine flowing to make yourself do those things that will provide lasting happiness and satisfaction. Maybe use the prospect of a modest shopping trip to encourage us to continue our exercise routine.

Avoid Guilt When We do not Live Up to Our Expectations

Related to the earlier point about feeling good about our actions, we will also behave poorly when we feel bad about ourselves.  We maybe slip and eat a cookie and then feel so guilty that we splurge and eat an entire half a cake. Often this is because we were very optimistic about how we would perform and then when we disappoint ourselves we throw in the towel. It is better to assume that we will be tempted and think through how we will respond to the temptation when it presents itself.

If you still slip up take it easy on yourself and avoid labeling yourself as a loser. Understand that everyone makes mistakes and you need to prepare yourself to avoid those mistakes next time.

There is much more fascinating advice in this book. There is the study that shows how chimpanzees are better than grad students in delaying gratification in order to achieve a greater reward. The reason that we fail to make the best decision shows that we are too smart for our own good.

Please pick up a copy of the book The Willpower Instinct: How Self-Control Works, Why It Matters, and What You Can Do to Get More of It at Any of your purchases made at Amazon after clicking through from my site helps support my blog. Thanks!