SOLD: Beautiful Happyzine

By Jill Hayhurst

The saying goes that money can’t buy happiness. For the most part, I tend to agree. I’m a wee bit biased though since I’ve committed myself to a life of non-profit work and studentdom, and thus I’m invested in the idea of being not so rich (at least financially). However social psychologist Professor Liz Dunn and Harvard business Professor Michael Norton have emphatically changed my mind through their short and cheerful book Happy Money.

The take home message of the book: money can buy happiness. But only if you spend it the right way. Dunn and Norton outlined five ways in their book, with plenty of fun evidence to support their points.

1) Buy experiences.

Spending money on experiences (e.g. trips to space) rather than material goods (e.g. toasters) leads to far greater happiness. This turns out to be a tricky concept for people to grasp, in part because material goods offer concrete benefits (omg – finally the perfect toast!), while experiencial outcomes are more abstract. The evidence on experiences and happiness, however, is very clear.

When deciding on the experience that is right for you, the authors recommend that you’ll get the “biggest bang for your buck” if it connects you with other people, will make a good story, is linked to your sense of self or who you want to be, and is unique or not easily comparable to other experiences.

2) Make it a treat.

Dunn and Norton write that, “abundance, it turns out, is the enemy of appreciation.”  This is a blessing and a curse of the human condition. We can aclimatise to (almost) anything, good and bad.  Getting use to cold winters is very adaptive. The flip side is that if we win the lottery and therefore get to drink fancy fair trade lattés several times a day everyday (i.e. living the dream), after a while we are not going to appreciate that delicious coffee anymore. The simple solution – avoid over-indulging in what you love. Make it a treat instead.

3) Buy time.

We often wish that they had more time to do what we love and to spend with friends and family, while simultaneously we tend to sacrafice our free time to save cash. Time affluence has important implications for happiness. Dunn and Norton write that people “who feel they have plenty of free time are more likely to exercise, do volunteer work, and participate in other activities that are linked to increased happiness.” This means that purchases that “reduce or eliminate the worse minutes of our day” can lead to happiness. Other ways to make people feel more time affluent include volunteering and socialising. Commuting and watching television, however, have the opposite effect.

4) Pay now, consume later.

I learned a new word: Neuroeconomist. These multidiciplinary researchers have found that thinking about paying high prices activates parts of your brain that are linked to pain. Actual, physical pain.  This doesn’t go away when you have to pay later, as they pain will still be waiting for you when the credit card bill arrives. The added drawback of paying later is the anticipation of the payment is stressful and detrimental to our happiness. The flip side is that anticipating good stuff adds to our overall enjoyment. The authors describe how drooling (both literal drooling and mental drooling) makes things taste better. Thus, they suggest that when and if you can, try paying now and consuming later, which allows time for positive expectations to develop, and gives you time to enjoy your purchase without the pain of paying.

5) Invest in others.

This is my favourite tip. It is both awesome advice that makes the world a better place, and also is supported by a series of super cool experiments that I love. For example, Dunn, Norton and colleagues gave a bunch of people an envelope with $5 or $20 in it. They told half the people to spend the money on themselves and the other half to spend it on someone else. People rated beforehand how happy they thought the money would make them. Everyone predicted that scoring $20 to spend on themselves would make them the happiest. But in fact, people who spent money on others were by far happier. And it didn’t matter how much money they spent on others ($5 or $20) or how they spent it (coffee, gifts, donations). The authors and their colleagues have run this sort of study all over the world, from Ghana to Canada, with the same results. Even giving a small amount of money to other people can have a huge impact on happiness levels.

An added benefit of these five pointers is that they can be enjoyed in combination. When you chose invest in someone else, make it a treat, make it an experience you can do together, and try to pre-pay for it. Keeping this in mind can powerfully influence your happiness. The research highlights that it’s not about having more money, but about how to spend it to get more from the money you do have.

Dunn and Norton suggest that before “you spend that $5 as you usually would, stop to ask yourself:

Is this happy money? Am I spending this money in the way that will give me the biggest happiness bang for my buck?”

For more research and information about the science outlined here, I highly recommend Dunn and Norton’s book ‘Happy Money: The Science of Smarter Spending’ (2013).

Jill Hayhurst is a PhD student at the University of Otago who is exploring the links between belonging, wellbeing, generosity, community, social justice and participation. Her research goal at the moment is to contribute to our understanding of what makes people engaged citizens, in the hopes that we can create resilient and thriving individuals and communities. She loves tramping, crafting, surfing tiny waves, and long walks with her dog and brand new husband around Port Chalmers.