Happy Money

The closing speaker for the 2013 Nexus Global Youth Summit at the United Nations, Michael Norton, co-author of the book, Happy Money: The Science of Smarter Spending, talked about the relationship between money and happiness. His research team at the Harvard Business School performed a series of experiments in which they gave individuals walking down the street, on sports teams and on sales teams, envelopes with $20 bills. Half of them were told to spend the money on themselves in the next five hours, and the other half were told to spend it on someone else or on a team mate.  Then at the end of 5 hours the researchers called and asked them if they were happier, less happy or the same as they had been five hours before.

Every time the experiment was conducted whether in the US, the UK or in Uganda, the results were the same. The individuals who were told to spend the money on themselves were no more happy or less happy than before -- their level of happiness did not change.  Those individuals who were told to spend it on someone else, ended up being more happy than before.  Interestingly, when individuals were told to spend the money on team mates, not only did the individuals spending the money feel happier, but also their teams performed better over a sustained period of time.

Norton's conclusion is that money can bring you happiness if you spend it on someone else.  Giving money away is more satisfying than spending it on yourself.

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