Money can buy happiness, apparently—and it actually doesn’t cost all that much.
Elizabeth Dunn and Michael Norton’s new book Happy Money: The Science of Smarter Spending is a nerdy but fun beach-read that will make you glad you splurged on the experience of a family vacation instead of a more tricked-out minivan and encourage you to take other smart money steps to boost your wellbeing everyday.
Dunn, a psychology professor at the University of British Columbia in Vancouver, and Norton, a marketing professor at Harvard Business School, present hundreds of academic studies in a fast-paced and accessible way to convince us that our intuitions on how to spend money are wrong at most every turn.
· Booking that ice hotel in Quebec, throwing yourself into a stinky pond in a Tough Mudder race or reserving a ticket to outer space on Virgin Galactic will make you happier than buying a nicer home or a flat-screen TV because you are building your “experiential CV,” connecting with others and making meaningful memories.
· Abundance is the enemy of appreciation. If you have a latte everyday, it no longer becomes a treat, right? It’s just a $4 thing you gulp down to get your caffeine fix. But if you restrict yourself to the house brew Monday through Thursday and splurge on a latte on Friday, it becomes a treat that you’ll savor.
· Buying a Roomba so you don’t have to vacuum your kids’ Cheerio pieces off the carpet every night might free you up to spend with your spouse—and save your marriage. But think long and hard before putting in the swimming pool that you’ll probably spend more time maintaining than enjoying.
· Paying for concert tickets or an all-expenses paid vacation in advance will increase the happiness you derive from the event at the time because you’ll have had the fun of anticipating it—and you’ll be tricked into thinking those margaritas by the pool are “free.”
While we think we know how to buy happiness—you could probably guess that buying lunch for afriend or donating regularly to charity will make you feel wealthier and happier—Dunn and Norton present compelling evidence that we don’t actually live our lives this way. The more money you give away, the happier you are, but most of us put only a tiny fraction of our cash toward this sort of prosocial spending.
Happy Money is a fast-paced, fun romp through the psychology of spending. It’s a testament to the virtue of thrift—that there are good uses of money that can maximize your wellbeing and that of others—without being preachy in the slightest. And it meets my top criteria for nonfiction summer reading: It’s packed with tidbits for your next cocktail party conversation and self-help-style practical tips to increase your financial happiness immediately.