Why Spending Money on Others Promotes Your Happiness

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Contrary to many people’s instincts, money spent on others gives more happiness than money spent on themselves.

This is not a radical idea which will blow your mind with its incredible newness. Far from it. But because it’s advice that sometimes goes against our natural instinct, it’s worth repeating.

Research suggests that many people think that spending money on themselves will make them happier than spending it on other people (Dunn et al., 2008). But there is evidence from various different studies that, on average, this isn’t true:

  • Participants who were given $5 or $20 to spend on another person were happier than those who spent it on themselves (Dunn et al., 2008).
  • People who spend greater proportions of their income on giving to others or to charity are happier than those who spend it on themselves (Dunn et al., 2008).
  • Canadian and Ugandan students who thought back to times they’d been generous to others were happier than those thinking back to money they’d spent on themselves (Aknin et al., 2010).

And we haven’t even taken into account how happy it makes the recipient.

Prosocial spending

But why? Why is it that spending our money on others—prosocial spending—makes us happier?

It’s partly because giving to others makes us feel good about ourselves. It helps promote a view of ourselves as responsible and giving people, which in turn makes us feel happy. It’s also partly because spending money on others helps cement our social relationships. And people with stronger social ties are generally happier.

So if prosocial spending makes us feel good, how come we tend to think personal spending will make us happier?

It’s because of the insidious effect money has on the mind. Studies have shown that the simplest reminder of money has all kinds of negative effects (from Vohs et al., 2006). It makes us:

  • less likely to help others,
  • less likely to donate to charity,
  • less likely to spend time with others,
  • three times more likely to want to work alone, despite knowing we’re taking on more work.

These are all precisely the behaviours that are likely to make us happy, yet just being reminded of money makes us less likely to engage in them.

It’s not that money is always evil; under the right circumstances it can motivate us and modern societies would be difficult without it. But money clearly has some negative psychological effects. So fight money’s evil side. Fool it. Betray it. Give it away! Generosity is the good type of selfishness.

Image credit: _Untitled_1



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About the author


Dr Jeremy Dean is a psychologist and the author of PsyBlog. His latest book is "Making Habits, Breaking Habits: How to Make Changes That Stick". You can follow PsyBlog by email, by RSS feed, on Twitter and Google+.

Published: 31 October 2011

Text: © All rights reserved.

Images: Creative Commons License