Positive Mondays: How money can buy you happiness!

As the year draws to a close, we are converging on the pinnacle of the party season and of course, shopping! So, can money buy happiness? 

A cross-sectional survey research has demonstrated that income has a reliable, but surprisingly weak effect on happiness within nations, particularly once basic needs are met. Denmark is a great case in point. Voted as the Happiest Country in the World in 2013, there are many other countries, who are wealthier than Denmark, but not as happy. One of the reasons why this is so, is because of the way people in Denmark spend their money. Civic contribution is the highest in Denmark. 

Indeed, while real incomes have surged dramatically in recent decades, happiness levels have remained largely flat within developed countries across time. One of the most intriguing explanations for this counterintuitive finding is that people often pour their increased wealth into pursuits that provide little in the way of lasting happiness, such as purchasing costly consumer goods. 

So does money buy you happiness? They answer is yes. 

In their seminal work, Dan Gilbert and Elizabeth Dunn 'If money doesn't make you happy, then you probably aren't spending it right', they say that “Money is an opportunity for happiness, but it is an opportunity that people routinely squander because the things they think will make them happy often don't.”

Elizabeth Dunn had a hypothesis. Spending money can buy happiness, when it is spent on someone else. She picked random people and handed them envelopes of $5 and $20. Half of them were asked to spend it on themselves. The other half, were asked to spend it on either charity or someone else. The people who had to spend it on themselves, bought trinkets, make up and food or drink. The other half who had to spend the money on others bought toys for siblings, made donations to charity and bought food for friends. Strangely, regardless of the amount, the people who spent it on others were significantly happier than the people who spent it on themselves. Even more strange was that the participants were asked if they would feel happier spending money on themselves or others? Most responded that they would be happier spending money on themselves. People could not even forecast their happiness levels. You might think this is a Western concept, but the study was repeated in Uganda and the results were identical. 

Strange as it may sound, money can buy you happiness. So The Beatles were wrong, money can buy you happiness and perhaps even love. 

Try this out for yourselves. Select a group of five people for whom you would perform an act of kindness, all in one day. It can be anyone. They needn’t be grand acts. They can be small but thoughtful and meaningful, but beyond what your normally do. For example, helping a friend with baby sitting, donating to a cause you believe in, opening the door for a stranger, writing a thank-you note, donating blood and so on. It will certainly take some planning and effort. Just find a small, new way to make a difference in the lives of others and tell us how you feel on HelpedSomeone@gmail.com

In a study pioneered by Dr Sonja Lyubomirsky, participants who performed five random acts of kindness showed a 42% increase in their happiness. Her research showed that “chunking”, i.e. performing all the acts on one day had the highest impact. 

So how does this relate to corporate life?

Ms Dunn conducted another experiment with Karmacurrency and an Australian bank. Karmacurrency is a non-profit organisation, where instead of giving one large cheque to a charity, corporates can divide the amount into small sums of money and distribute the Karmacurrency Coupons to its employees, to make a donation to a charity of their own choice, on behalf of the company. They found that giving the employees an opportunity to actively participate in corporate giving actually increases their own job satisfaction. The experiment was replicated in the pharmaceutical industry, and it was found that teams who spent money on their teammates, sold significantly more than teams who spent the money on themselves. 

So how does money actually buy you happiness? 

First, if you spend it on others! This helps you gain significant levels of positivity and performance. 

Second, buy experiences rather than material goods. Go to a nice concert, or do something that you have not done before. Even better, take a friend along. 

Third, as the Chinese saying goes, in the first bite is the banquet. Spend on many experiences rather than on a few big ones. Research shows that it is the number of experiences and not the duration of experiences that matter. As Dunn and Gilbert put it ever so eloquently, “As long as money is limited by its failure to grow on trees, we may be better off devoting our finite financial resources to purchasing frequent doses of lovely things rather than infrequent doses of lovelier things”. Think about it. Eating two muffins does not give you twice the happiness of eating one muffin. Instead of spending on a three-hour spa treatment, you might be better off spending on two, one-hour treatments on two separate days. Buying a Rs 10 chocolate for two people certainly has a better impact than buying a Rs 20 chocolate for one person, or for that matter perhaps, a Rs 10 chocolate given a fortnight apart. 

Fourth, “invest” in learning experiences or even products. Take that salsa or hip-hop dance class, the French course that you were always planning to learn. Even better, do so with a partner or a good friend. Buy the guitar that you have been wanting to learn, but make a habit of the guitar lessons too! 

Fifth, take your family for a charity drive. You have already spent money on your old clothes, which do not fit. Gather all those old clothes in a bag, drive to the closest orphanage and get your kids to donate the clothes themselves. Even better, take your nieces and nephews along. You and your kids will have a great experience and it will be a great lesson in being grateful for what you already have. Your material purchases have already given you some happiness and now knowing someone is using it, will perhaps double the pleasure. 

Sixth, pay now, consume later! Counter intuitive as it may sound, the anticipation of the pleasure makes the happiness last longer. Just thinking of future pleasurable events makes the event last longer. 

Seventh, there are two kinds of shoppers. One who persistently chase the best possible deal (maximizers) and those who are happy with what meets the basic requirements. Maximizers, are eventually never happy. Someone else would have gotten a better deal on Snapdeal instead of the local electronics shop.

Eight, celebrate someone’s success. Take them out for lunch or just a coffee. Invite others. Instead of hosting just another party, use the occasion to genuinely celebrate individual successes. 

Why do these “purchases” make us happy? 

First, helping someone feels really nice and amazingly, it feels natural. It feels right. Scientists have discovered that our first and natural instinct is that of cooperation with others to help them achieve their goals. It is what sets us apart from other animals. 

Second, our relentless focus on our own issues increases our anxiety and stress levels. Studies show that when we help others, our focus momentarily shifts outwards, towards others. There is a shift in our thinking and our ability to contribute to someone boosts our self-esteem. We feel more capable on making an impact. 

Third, it is now proven in many studies that helping others not only reduces stress but also lengthens our lives. 

Finally, there is the very famous, “pay it forward”. We find that people who flourish are engaged with their families, work and communities. These acts of kindness are contagious.

When you do them, you want to do more. When people receive them, they want to do more, creating an upward spiral of positivity. 

Here's wishing everyone great spirits and a Merry Christmas! 

The author is the Founder of The Positivity Company and also has over 23 years of global sales and service experience. This is a series of articles by the author called 'Positive Mondays' about how positive thoughts can have a multiplicative effect, simultaneously impacting all work and life outcomes.