Buying Happiness by Giving Away Your Money

This month at Optimize Your Life we are exploring the intersection of money and happiness.

We spent the first week of May learning the basics and how low income can cause unhappiness.

Last week we looked at ways to get more happiness out of the money that we already spend.

We’re spending this week exploring places where we should spend more money to get more happiness. We started on Tuesday with spending more money on experiences.

Today I want to look at a more counterintuitive option: giving your money away.

Philanthropy as a Route to Happiness

For some, this may seem obvious. For others, it may seem nonsensical.

Given all of the different things and experiences that we could trade our money for, why would giving it away for nothing buy us more happiness?

Philanthropy as a route to happiness is not a new idea. Jean-Jacques Rousseau said, “I know and feel that to do good is the truest happiness the human heart can savor.”

As much as I appreciate advice from philosophers, I can’t consider it to be completely sound advice until its been backed up by the scientists.

And now it has.

The Science of Helping Others

Science now proves that doing good things for other people makes us happy.

For example, one study by Sonja Lyubomirsky had participants consciously complete five acts of kindness over the course of a single day. These people reported significantly increased happiness that lasted for days after the experiment.

The acts of kindness don’t need to be giant things, either. You don’t have to fund a scholarship or give away a car to get a happiness boost.

You can make a small donation to a favorite charity, pay for the person behind you at the drive-through, and buy flowers for someone you love.

How Much Do You Give Away?

Elizabeth Dunn has conducted many studies on money and happiness and is a great source of information on this topic.

One of her studies looked at the happiness of people before and after they received large bonuses. The amount their happiness increased was unrelated to the size of the bonus and did not increase with spending on themselves, their bills, or their investments.

Instead, the boost to happiness was directly linked to what percentage of the bonus was donated to charities or spent buying things for other people.

Spending on Others

In a follow-up, Dunn gave cold hard cash to participants.

Everyone was given either $5 or $20 and told to spend it by the end of the day. Half were told to spend it on themselves and half on others or charitable donations.

You may be able to guess where this is going by now.

Those who spent their money on others were much happier than those who spent it on themselves.

Just Give!

In both of these studies the happiness boost was not linked to the amount of money spent.

The people who spent $5 on a friend were just as happy as those who spent $20. The people who donated 50% of a $10,000 bonus were just as happy as those who donated 50% of a $1,000 bonus.

If you’ve been waiting until you have more money before donating, stop waiting!

Give what you can. Give what you’re comfortable with. Then build it up over time.

If you feel like you can only donate $10 a month, then start donating $10 a month right away! You’ll be happy that you did.

Join the Conversation!

So what about you? Have you found spending on others or donating to charity makes you happy? Have you found any specific instances that work better than others? Let us know in the comments!

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