They say money can't buy you happiness, but new research published in the journal Science suggests that it can, if you spend it on someone else. “Simply making very small changes in how you spend money can make a difference for happiness," said Elizabeth Dunn, an assistant professor at the University of British Columbia, who led the research along with Michael l. Norton, an assistant professor at Harvard Business School. Studies of happiness have long found that, unless people are extremely poor, getting more money brings surprisingly small gains in positive feelings. The researchers suspected that perhaps the reason people, weren’t happier was not because of the money itself, but rather because of what they did with their money-mainly, spending it on possessions for themselves.
The research was done at a small Boston-area medical supply company, where employees received bonuses averaging about $5,000. The researchers measured their levels of happiness before and after receiving the money. What they found, said Norton, was that “the size of the bonus you get has no relation to how happy you are, but the amount you spend on other people does predict how happy you are."
The researchers used a five-point scale, asking people, “Do you feel happy in general?” There were five answers provided: yes, most of the time, sometimes, rarely, or no. They found that people could expect to go up a full point on the scale if they spent about a third of the bonus on others, Dunn said. She calls this “prosocial” spending. She continued with the example of Tim and Dan: They both answered the question that they were happy “sometimes” before receiving the bonus. If Dan spent a third of his bonus “prosocially" and Tim spent none in this way, the researchers would expect that after spending their bonuses, Dan would be happy “most of the time." This is exactly what happened.
The study fits in well with other current research that finds that helping others is the best way to help yourself. People who give more and are more socially connected are happier. “There’s so much benefit to the person who contributes to others that l often think that there is no more selfish act than a generous act," said Tal Ben-Shahar, author of the book Happier and teacher of a positive psychology course on happiness, Harvard’s most popular class. During one week of the course, Ben-Shahar asks students to do five small acts of kindness a day. Examples of these could be giving change to homeless people, being nice to waiters, or calling grandparents. “The effect of it is quite remarkable and lasts for much longer than a day," he said.
Similarly, the Science study found that spending a small amount of money could bring large results. In a separate experiment, the researchers gave-college students either $5. or $20 and told them to quickly spend the money. Some were told to spend it on themselves-on a bill or a gift to themselves. And some were told to spend it on others-on a donation to charity, or la gift to someone else. The vast majority of the students predicted that they would be happier with $20 than $5.
That evening, the participants’ happiness levels were measured. But again, the amount of money did not matter, those who spent it on others felt happier than those who spent it on themselves. “We don't want to suggest that more money would never matter," Dunn said. “It’s just that in our studies we found that how people spent their money mattered at least as much as how much money they received. Indeed, there was no effect at all on the amount of money received [in the two studies].