Why It Matters
Research shows we often fail to spend money in ways that maximize our happiness. Happy Money, by Elizabeth Dunn & Michael Norton, provides a research-backed framework for getting more satisfaction from every dollar by changing how we spend rather than how much we have. The authors' core principles offer actionable ways to transform spending habits for greater wellbeing.
Core Principles
Buy Experiences, Not Things
Spending money on experiences, such as travel, concerts, and learning new skills, provides more lasting happiness than material purchases. Experiences give us stories to tell, connect us to others, and become a meaningful part of our identity. While things get old, experiences grow richer in memory over time.
Make It a Treat
Abundance reduces appreciation. By deliberately limiting access to the things we enjoy — whether lattes or luxury cars — we can maintain their specialness and maximize pleasure. Small pleasures deliver more happiness when they're occasional treats rather than everyday occurrences.
Buy Time
Trading money for more free time by outsourcing disliked tasks or reducing commute times can make us happier than buying more stuff. Yet people often fail to spend money to buy themselves more time, even when they can afford to do so. Making time-saving purchases helps combat feelings of time scarcity.
Try It Now
- Plan a novel experience with friends instead of buying a new gadget
- Pick one regular indulgence and make it a weekly treat rather than a daily habit
- Use a portion of your next paycheck to outsource an unpleasant task
- Pay upfront for future fun activities, then enjoy them feeling "free"
- Buy coffee for a coworker and observe how it boosts both of your moods
Quote
"If human happiness is even half as complicated as the stock market, there is little reason to assume that intuition provides a sufficient guide."
