Last week I argued that the cost of happiness is actually significantly less than the commonly-cited $75,000. This, I argued, is because we are bad at knowing which spending will make us happier and which will not.
This may lead you (quite justifiably) to ask me to back this up. If I claim that people should spend their money differently, then how do I think they should spend it? And can I prove that they will be happier?
So today I want to talk about an area of spending that has great return on investment when it comes to happiness: spending on others.
Spending on Others vs. Spending on Ourselves
In 2008, some researchers gave money and instructions to participants in a study. Some participants received $5 and some received $20. Some were instructed to spend the money on themselves and some were told to spend it on someone else.
The researchers later called the participants to find out how they spent the money and to compare their happiness levels before and after. Spending money on oneself was not linked to any increase in happiness. Spending on others definitively did increase happiness, whether $5 or $20.
This link between happiness and spending on others appears to be innate, or at least learned very early. We can see this in a study of 2-year olds.
A group of toddlers were given eight treats each (either Goldfish crackers or Teddy Grahams) and were introduced to a monkey puppet who loved those treats. Next, the kids were given an extra treat specifically to feed to the puppet. They were then encouraged to give the puppet treats from their own stash.
The happiness of the two-year olds was measured based on the reactions on their faces. (This is probably a better method than trying to get babies to respond to questions about Cantril’s Self-Anchoring Ladder.)
The toddlers were happier giving treats to the puppet than receiving them themselves. Even more interesting, they were happier giving up their own treats than the researcher’s treat.
This is not just a first-world phenomenon, either. One study asked participants in Canada and Uganda to think about a time they spent a significant amount of money. Half were asked to think about a time they spent on themselves and half were asked to think about a time they spent on someone else. Those that thought about spending on someone else were happier, regardless of their home country.
Spending for Maximum Happiness
The final research for today involves study participants being given Starbucks gift cards. Some of the participants used the card for themselves, some gave it to a friend, some bought themselves and a friend coffee and drank them together, and some went with a friend but only paid for their own coffee.
The happiest people were the ones that bought the coffee for their friend and then hung out and drank together. The combination of doing something for someone else, getting to see that person’s reaction, and nurturing a relationship is a powerful one.
So if you’re really looking to get the most possible happiness out of your spending, the research says that you should spend your money, and a bit of time, on someone else.