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Happy Money

The New Science of Smarter Spending

By Elizabeth Dunn & Michael Norton
13-minute read
Audio available
Happy Money: The New Science of Smarter Spending by Elizabeth Dunn & Michael Norton

Happy Money (2013) explains how you can and should spend your money to maximize your happiness, through five simple principles that can be applied to your everyday life.

  • Anyone seeking ways to spend money in ways that will make them happier
  • Anyone curious how charitable giving can make you feel good about yourself

Elizabeth Dunn is an associate professor of psychology at the University of British Columbia in Vancouver. Her work has been featured in top academic journals and hundreds of media outlets worldwide.

Michael Norton is an associate professor of marketing at Harvard Business School, who in 2012 was selected as one of the “50 People Who Will Change the World” by Wired magazine.

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Happy Money

The New Science of Smarter Spending

By Elizabeth Dunn & Michael Norton
  • Read in 13 minutes
  • Audio & text available
  • Contains 8 key ideas
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Happy Money: The New Science of Smarter Spending by Elizabeth Dunn & Michael Norton
Synopsis

Happy Money (2013) explains how you can and should spend your money to maximize your happiness, through five simple principles that can be applied to your everyday life.

Key idea 1 of 8

Cash, cars and luxury houses might seem to guarantee happiness, but it’s not the case.

Most people assume that winning the lottery would make them happier. They think once they can buy that luxury car or dream beachfront house, then they will truly be happy.

Let’s examine this notion more closely.

Sure, there is a connection between money and happiness. In fact, at least 17,000 academic articles have been written supporting the existence of such a connection, so clearly there’s something to it.

But we are mistaken in assuming that the connection between money and happiness is linear and automatic; that is, that more money will always make us substantially happier.

One study showed that Americans typically assume that if their income were to double, from $25,000 to $55,000 a year, they’d be roughly twice as happy. But statistics show that this only results in a 9 percent increase in happiness.

So why does having more money not make us as happy as we’d think?

It’s simple: your level of income has little influence on how much you smile, laugh or enjoy yourself on a daily basis.

In fact, research has shown that just thinking about wealth can suppress behaviors which would make you happier. In one study, showing participants a photograph of money made them more likely to choose to engage in solitary activities, such as personal cooking classes, rather than social activities which might make them happier, like having dinner with friends.

So while having more money won’t necessarily make you happier, having money in general isn’t a bad thing. What if the problem actually lies in how you choose to spend your money?

The next five blinks will lay out principles of spending money in a way that will make you happier. 

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