How to Buy Happiness (Part 2)

In Part One, I explained how buying experiences rather than material goods promotes happiness.

Well, get ready for another bombshell. If you really want to buy happiness, spend what little money you have on other people.

Yep, that's right. It's scientifically proven that when people spend their money on others, it brings more joy than when they spend it on themselves.

A study conducted in 2013 is one of the most illustrative examples of this. The experimenters gave participants either $5 or $20 and directed some of the participants to spend it on themselves and other participants to spend it on someone else by the end of the day. Those who spent the money on others reported increased happiness while those who spent it on themselves experienced no change in their mood. Surprisingly, the amount of money didn't even matter. So even those who spent $20 on themselves did not experience the same boost in happiness that those who spent $5 on others.

This sentiment has been proven again and again. For example, people who give more of their annual bonus to charity or others report a higher degree of happiness than people who spend it on themselves.

So why does this happen?

People are social beings. Spending money on others promotes relationships and hence increases happiness. Spending money on others also improves our perception of ourselves. Ie, by viewing ourselves as altruistic, generous individuals we think more highly of ourselves. Third, when challenged to spend money on someone else, it usually forces people out of their routine schedule, bringing excitement into an otherwise monotonous day.

I had the opportunity to put this into practice a few weeks ago. When a customer gave me a $20 tip at work, I immediately thought about what I would spend it on...a new scarf, a fancy lunch, etc. But then I remembered this research and I resolved to find a way to spend it on others. Since my supportive coworkers were partially the reason I received the tip, I chose to spend it on them. I racked my brain for the best way to use it and eventually settled on purchasing a Groupon deal at a local bakery for $40 worth of pie for $20. The following day, I made a trip out to the bakery, picked out a few pies and delivered them to my coworkers as a surprise.

It was even more satisfying than I imagined to see my coworkers faces light up as they indulged in goodies I had bought for them.

So the next time you feel down in the dumps resist the urge to splurge on yourself. Instead, try buying something small for your mother, or sister, or best friend...or even the homeless guy on your block. Your wallet and heart will thank you!