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May 01, 2021

Maybe money can buy happiness after all

Turns out that money can, indeed buy happiness -- as long as you don't spend it on yourself, according to  Harvard Business School professor Michael Norton.

AdMaking more money leads people to accumulate more and more material goods, but not to accrue the things that really make people happy -- like relationships with others, Norton explains in a recent TED talk

Unfailingly, people link happiness to feelings of affiliation, whether with family, friends, colleagues or neighbours. So, spending money to strengthen ties offers more happiness-bang for your buck, he maintains.

To test his idea, researchers approached strangers (some of whom were students at the University of British Columbia) on the street and gave them different sums of money ($5 or $20) and told them to spend it by 5 p.m. that day. Half were told to spend the money on themselves, while the other half were told to spend it on others.

When reached that evening, those who spent the money on themselves bought things like coffee and food, while those who gave money to others reported spending it on things like gifts for their siblings or donations to the homeless.

The result? Those who had spent their money on others reported feeling much happier at the end of the day than those who had spent their money as they usually did, on themselves. There was no difference in happiness between those who spent $5 or $20, suggesting that it is not how much money you spend, but how you spend it, that boosts the spirits.

Does this ring true for you? Does spending money on others really make that much of a difference?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...