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Happy Money is a book written by Elizabeth Dunn and Michael Norton about the science of spending money. Nowadays we all focus on earning more money, thinking this is what will satisfy us. But what if I told you can gain more satisfaction simply by spending money differently. The two authors explain through their research and experiments what really will make you happier and how you can use your money to nurture that.
I think we all know by now that experiences will make you much happier than material objects. So buying a trip to Iceland could guarantee you more happiness and satisfaction than just buying the next smartphone. This interesting fact means companies such as Google have stopped giving money bonuses to their employees, but instead sending them off to a cruise on the other side of the world. Not only do they enjoy the experience, but going with other employees creates social bonds and can improve the company’s performance. Google is using ‘happy money’.
We all love treats. So why don’t we have more? Honestly, it’s because we prefer having them all the time. We would rather have the opportunity of eating chocolate everyday rather than just one day a week. But guess what, if you eat chocolate everyday, it ceases to be a treat. The book suggests we force ourselves to have treats. Instead of spending $5 everyday on a coffee, spend $3 everyday and then on Sunday buy a big nice Frappucino as a treat (plus you’ll have some money left over for next week!). I love this quote in the book: ‘You should never have a yacht, you should have a friend with a yacht.’ It follows the same principle. Once the initial incredulity of having a yacht wears off, you won’t love it as much. But if a friend has it and you get to go on it a few times a month, you will definitely appreciate it and love each time you visit it. It becomes a treat you look forward to.
This method, I think, would be the hardest to implement. We all know that the 2 weeks before going off on holiday are the most exciting ones. You’re getting ready for the trip, you’re discussing what will happen with everyone, you even spend your evenings staring at your screen in awe at beautiful resort you’re soon to see. We all do it and we all love it. So why not do it on purpose? Instead of buying concert tickets for tomorrow, buy them for in 2 weeks time. This could be hard to implement because our brains are wired to think the sooner we get it the better. But actually the book demonstrates that we are happier the longer we wait. So try buying some time and see how it affects you.
Invest in others
You really don’t realise how much spending money on others makes you happy until you do it regularly. Instead of buying a $5 coffee for yourself, inviting someone else out for coffee and buy two $2.50 coffees. The experience will be much more enjoyable for both of you. If someone gives you $10 out of the blue to spend on yourself, you will most likely spend it on expenses, food or other things you need, therefore not really increasing your happiness. But if you are told to spend it on someone else, the act of treating someone else will make you happier simply because you are sharing this generous experience with this person.
There were other really interesting points in the book, which is why I encourage you to read it. It’s true that we all focus on earning more money (basically what my website is about) but it’s important that if we want to learn how to earn money, we should also learn how to spend it. We can all agree that the more happiness money can give, the better. Try treating your friend next time you go out and make a mental note of what makes you happier. You will learn a lot about yourself, and of course, a lot about money!