“Money can’t buy happiness.”
Turns out, it’s not so. Michael Norton, a professor at Harvard Business School, has done extensive research on money and happiness, and Norton says in fact money can buy happiness. It’s just that we usually spend on the wrong things.
Norton’s team did a little experiment. They went to the University of British Columbia in Vancouver and randomly selected students on campus. First they asked them how happy they were. Then they gave each one an envelope. Inside was a slip of paper and some cash.
For some the slip of paper in the envelope said, “By 5 o’clock today, spend this money on bills, personal expenses, or perhaps a gift for yourself.” For others the slip of paper said, “By 5 o’clock today spend this money on a charitable donation or a gift for others.”
Some envelopes had a $5.00 bill and some had a $20.00 bill.
At the end of the day the researchers called all the spenders and asked how happy they were. Those who had spent money on others were happier, and those who spent on themselves were the same—no more, no less happy. And, the study revealed, it didn’t matter how much you’d been given. People who had been given $20.00 weren’t any happier than those who’d been given $5.00. All that mattered is who you spent the money on.
So money can buy happiness, the paradox is always—you have to spend it for others to get the effect.
I’ll bet you have a $5.00 bill or a $20.00 bill in your pocket today. Why not be happier?
To see Michael Norton’s TED Talk on money and happiness, here’s the link: