If you think money can't buy happiness, you're not spending it right. The problem isn't that we don't have enough money—it's that we tend to spend it on things that don't contribute to happiness. If you follow core 5 principles of smarter spending money can buy happiness. Most people recognize that they need professional advice on how to earn, save, and invest their money. When it comes to spending that money, most people just follow their intuitions. But scientific research shows that those intuitions are often wrong. Happy Money explains why you can get more happiness for your money by following five principles, from choosing experiences over stuff to spending money on others. And the five principles can be used not only by individuals, but by companies seeking to create happier employees and provide "happier products" to their customers. companies from Google to Pepsi to Charmin have put these ideas into action. Along the way, luxury cars often provide no more pleasure than economy models, that commercials can enhance the enjoyment of watching television, and that residents of many cities frequently miss out on inexpensive pleasures in their hometowns.
Data from a large-scale national survey shows that we generally overestimate money’s effect on most people’s life satisfaction and happiness.
Principle 1: Give Experiences, Not Stuff – Giving things is okay, but the person receiving those things gets used to them, or what psychologists call habituated, quickly. A new 60-inch TV looks really big when you first get it, but it quickly becomes “normal” because you recalibrate your expectations about how big a TV should be. Instead, if you bought your partner a weekend trip to the city, the experience provides a set of memories that will last a lifetime.
Principle 2: Give the Gift of Anticipation - If you’re going to follow the first principle and are planning on buying your partner a special trip or vacation, schedule it for 6 months from now. Now, you may think a holiday gift trip should occur close in time to the holidays. However, by waiting a few months your partner not only gets the joy of learning they are going on a fantastic trip, but also gets to enjoy looking forward to it for several months. All of that anticipation makes the trip that much more enjoyable.
Principle 3: Focus on Giving Quantity - If you’re trying to decide between getting your partner one big present or several little presents, a few smaller gifts are the way to go. By giving several gifts, the receiver’s enjoyment extends over a longer period of time. One very expensive handbag produces a lot of joy, but a stocking stuffed with several smaller items like earrings, a scarf, lipstick, and tickets to the movies goes a long way.
Principle 4: Use the Right Information to Pick a Gift – Finding a gift that your partner will actually like can be difficult. To make the proper choice, you can either rely on your own thoughts and intuition about your partner’s likes and dislikes, or you can rely on what large numbers of others say. For example, if your partner enjoys watching movies, how will you know which DVD or Blu-ray to get? You could go with what you think your partner would like, or you could see what movies others like by going to a site like RottenTomatoes.com, where thousands of viewers and hundreds of critics weigh in on a movie’s quality. Although you may have your doubts about the merits of a maudlin film like Before Midnight, you may be better off basing your decision on ratings from the 27,000+ website users.
Principle 5: Give to Help Others Rather than Yourself – Rather than by for yourself, or even your partner, spend some money helping others. At some point in your life, you get to the point where anything you really want, you already have, or you simply purchase for yourself.
So, are you getting the biggest happiness bang for your buck?
