From Elizabeth Dunn’s “Happy Money”
Spending Money On Others is Better Than Spending it On Yourself.
- “Rather than think about the different ways you can spend your money on yourself to maximize your own happiness, consider investing it in others. Spending money on others can increase your happiness even more than spending your cash on yourself, but you have to be willing to make yourself a little poorer to reap these benefits.” (p. 107)
- “New research shows that spending even small amounts of money on others can make a difference for our own happiness. And we’ll see that rewarding customers and employees with opportunities to invest in others—from kids in distant countries to coworkers in the next cubicle—can enhance not only individuals’ well-being, but also the company’s bottom line.” (p. 107)
- “More importantly, the consequences for happiness were similar across Canada and Uganda. People in both countries felt happier after thinking about a time when they’d spent their own money on others rather than themselves. Investing in others promotes happiness, even in relatively impoverished countries where money is tight and where prosocial spending commonly entails helping someone in dire need rather than enjoying a pleasant trip to the mall.” (p. 113)
Donating to Charity Made People Happier.
- “in 120 out of 136 countries, people who donated to charity in the past month reported greater satisfaction with life. This relationship emerged in poor and rich countries alike, and held up even after controlling for individuals’ income.” (page 113)
- “By the end of the day, individuals who spent money on others were measurably happier than those who spent money on themselves—even though there were no differences between the two groups at the beginning of the day. And it turns out that the amount of money people found in their envelopes—$5 or $20—had no effect on their happiness at the end of the day. How people spent the money mattered much more than how much of it they got.” (p. 108)
- Americans were asked “How much do you spend on yourself?” (rent, expenses, bills, gifts to yourself.) They were told to write down the total number.
Next they were asked, “How much money do you spend on others?” (gifts, charity). They were told to write down the total number.
The average ratio for these two numbers was 10-1. The happiest groups were the ones that had a higher ratio of “spending on others”, compared to “spending on themselves.” The income levels didn’t matter.
“In a representative sample of more than six hundred Americans, personal spending accounted for the lion’s share of most people’s budgets.3 The average ratio of personal to prosocial spending was more than 10 to 1. But the amount of money individuals devoted to themselves was unrelated to their overall happiness. What did predict happiness? The amount of money they gave away. The more they invested in others, the happier they were. This relationship between prosocial spending and happiness held up even after taking into account individuals’ income. Amazingly, the effect of this single spending category was as large as the effect of income in predicting happiness. If you’ve been focusing on trying to make more money, remember that giving some of it away can be just as rewarding as getting more of it.” (p. 109) - Donating money is good for your health. People who donated money are found to be healthier.
“People who report donating money to charity feel wealthier than those who do not, even controlling for how much money they make. And giving as little as $1 away can cause you to feel wealthier.”(p.125)
Strategies for Investing Time or Money for Others.
- Investing time or money should be instrinsic.
- It should be done out of your own choice, not forced upon you.
- It should be done in a personal way with a sense of connection.
- It should be done in a way where you can see the actual impact.
- “Students reported feeling better on days when they did something prosocial, but only when their actions felt self-chosen. If students helped because they felt like they had to or because people would be mad otherwise, they felt worse on days when they did good things.” (p. 116)
- “helpers felt happier if they had been reminded that helping was their choice rather than being told they should help. What’s more, people reminded of choice provided higher-quality assistance and felt a closer sense of connection with the person they helped.” (p. 117)
- “people derive more happiness from spending money on “strong ties” (such as significant others, but also close friends and immediate family members) than on “weak ties” (think a friend of a friend, or a step-uncle).” (p. 118)
- “The people who used the gift card to benefit someone else and who spent time with that person at Starbucks. Investing and connecting provided the most happiness. Think of your own prosocial spending budget in terms of levels of connection. You’re likely to get the biggest happiness bang for your prosocial buck if you invest in others in ways that help you connect with people, especially people you care about.” (p. 119)
- “Enabling donors to see the specific impact of charitable initiatives carries a huge potential payoff. By maximizing the emotional benefits of giving, the strategy can make people more willing to behave generously in the future. A recent experiment shows that giving and happiness are mutually reinforcing, creating a positive feedback loop and providing empirical support for our favorite song from summer camp, “Happiness Runs in a Circular Motion.” (p. 122)
- “When prosocial spending is done right—when it feels like a choice, when it connects us with others, and when it makes a clear impact—even small gifts can increase happiness, potentially spurring a domino effect of generosity.” (p. 123)
- “Remember the research that showed that giving time away can make you feel like you have more time? Giving money away has a parallel effect. People who report donating money to charity feel wealthier than those who do not, even controlling for how much money they make. And giving as little as $1 away can cause you to feel wealthier.” (p. 125)
Spending On Your Peers is Good For Business/Sports
- “Laszlo Bock, vice president for people operations at Google, explains that “[a]ny employee can give any other employee $150” from a special fund.40 “There’s no oversight, no management review, no approvals required. The only requirement is that you have to write at least a sentence explaining why they got it.” Even in a company that pays “aggressively” (as Laszlo puts it), where $150 represents a vanishing fraction of most employees’ income, Google’s research shows that this small bonus “is more effective—and makes people happier—than a cash-based award from a manager or executive.” (p. 127)
- “Teams who had been given personal bonuses went from winning 50 percent of their games before they received the bonus to 43 percent after. But those teams who received prosocial bonuses went from winning 50 percent of their games to dominating the league, winning fully 80 percent of their games post-bonus.” (p. 128)
- For Pharmaceutical companies, each member was given 15 Euros. Some teams were told to spend this money on their teammates. Some teams were told to spend this money on themselves. The teams, that spent the money on their teammates, saw their sales performance go up.
Other Good Quotes:
“a Starbucks gift card provided the most happiness when people used it to buy coffee for someone else, while accompanying them to Starbucks—which allowed them not only to invest in others (chapter 5), but also to buy an experience (chapter 1), and change the way they spent their time that day (chapter 3). And in your daily life, you could knock off the other two principles by paying up front for the Starbucks card at the beginning of the week (chapter 4) and putting just enough money on the card to buy a basic coffee Monday through Thursday, but a Frappuccino on Friday—making that delicious dose of creamy caffeine a treat (chapter 2).” (p. 135)
“We’re not suggesting that giving all of your money away is wise. Again, money does increase happiness to some extent, especially when it moves you to a decent standard of living. As in the other chapters, though, we propose doing something different than you usually would with the $5 in your wallet. Here we suggest that sometimes—just sometimes—you think about what you could do with the money for someone else.” (p. 134)