A colleague recently loaned me her copy of Happy Money: The Science of Happier Spending by Elizabeth Dunn & Michael Norton. It’s all about the scientific research on how we can increase our personal happiness with our money—what we spend our money on, when we spend it, with whom we spend it, and for whom we spend it. (Read Elaina’s blog about spending money on experiences Buy experiences instead of things.) The entire book is quite interesting, some of it provocatively counter-intuitive, but I was particularly struck by the chapter on giving.
I can recall many instances of giving or sharing (referred to as “pro-social spending” in the book) that made me feel happy, although I never gave much thought to it. I’m not alone in getting pleasure out of giving. In the book, the authors relate an experiment where random people are given an envelope with either $5 or $20 in it, and instructions to spend it on themselves or others. The participants were called later that day to report on what they did with the money and how they felt. Those who spent the money on others were “measurably happier” than those who spent it on themselves, whether it was the $5 or the $20.
The chapter goes on to highlight a representative sample of 600 Americans whose average spending was better than 10 times more on themselves than on others.
How much people spent on themselves did not impact overall happiness, but the more money they gave or gifted, the happier they were, despite income bracket.
A Gallop World Poll of more than 200,000 people in rich and poor countries showed the similar results. Giving more created as much happiness as making more.
I recall a time when my daughter was 6 and we went to an event about the plight of struggling bus drivers in Mexico. She was so moved by their story, she emptied her piggy bank back at home to give to the strikers’ families. She was thrilled to help and did not regret her loss of spending money. Even very young children exhibit more delight in sharing treats than consuming them themselves. A study with toddlers showed they actually derived more happiness “when the treat came from their personal stash.”
It is easy to raise an eyebrow at these kinds of studies because we have to depend on people to honestly respond or observers to not have desired results color their interpretations. I’m the first to raise an eyebrow. But, an interesting study measured cortisol (the stress hormone) of participants given $10 to do whatever they wanted with the money showed that those who gave the least to others had higher levels of cortisol in their saliva. We’ve all heard that stress can have serious impact on our physical health. Pro-social spending may help us live longer!
Whether I live longer or not, I am now more conscious of my feelings after giving and more observant of others. I was recently sitting at a stop light where a panhandler stood with his sign. We were a line of 5 cars, I was 3rd down. I rolled down my window to give the elderly man a few dollars. It must have inspired the other drivers because 3 more followed suit. I thought how generosity begets more generosity. I felt good about my gift and imagined the other drivers felt the same. All that happiness in a simple act at a stop light!
As a financial counselor my typical advice is cutting back and saving. Cutting back as necessary to stop digging the debt hole, and saving to stay out of the hole. I don’t recall ever recommending someone give more; usually I suggest just the opposite.
While I may not always change my recommendations, I will certainly view them differently and encourage the people I meet with to think more about what makes them happy when deciding where their money goes.
For some, giving financially may not be realistic and that’s okay. The good news is there is still a way to become happier…give your time. Check out this post: Change your life in one easy step: Volunteer.
If you’d like to give more, but credit cards are holding you back, LSS can help. By meeting with a financial counselor, you will work together on an action plan to become debt-free for good. Think how financial freedom can change YOUR life! For your free session, call us at 888.577.2227 or begin your online session by clicking here: GET STARTED.