Hapless lotto winners, take heart. We did discover at least one way to buy happiness with your money: Give it away.
Why might this be the case? We hypothesize that making more money leads people to accumulate more and more material goods, but not to accrue the things that really make people happy–relationships with others. Think of the wealthy person who buys three homes with 15 guest bedrooms–yet finds himself without any friends or family to host. Even shopping, Americans’ longtime preferred method of social interaction, now requires no social interaction at all. You can fill your 16-bedroom home with goods without leaving it. All you need is a cable modem and a PC.
To test our idea, we approached strangers on the street and gave them different sums of money ($5 or $20) and told them to spend it by 5 p.m. that day. Half were told to spend the money on themselves, while the other half were told to spend it on others. When reached that evening, those who spent the money on themselves bought things like coffee and food, while those who gave money to others reported spending it on things like gifts for their siblings or donations to the homeless.
The result? Those who had spent their money on others reported feeling much happier at the end of the day than those who had spent their money as they usually did, on themselves. There was no difference in happiness between those who spent $5 or $20, suggesting that it is not how much money you spend, but how you spend it, that boosts the spirits. When we asked people to choose what would make them happiest, most people predicted that spending money on themselves would make them happier than giving it away, suggesting that people overestimate the buzz they get from a new purchase and underestimate the warm-and-fuzzy benefit to social spending.
Money certainly makes some things in life easier, but many aspects of life remain irritatingly the same. You might make more money, but you’re still stuck with the same in-laws, siblings, traffic jams and software glitches. So should you keep trying to make money? Absolutely. As long as you remember to spend some of it on others