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July 30, 2021

If your salary doubled, would you be twice as happy?

Would making twice as much money make you twice as happy? Probably not, according to the authors of the forthcoming book Happy Money: The Science of Spending.

Most people anticipated that they would feel twice as happy if their salaries more than doubled.

But when researchers polled participants at two different income levels, they found that those making more than twice as much were only 9% happier than those making the original threshold amount.

The study’s authors, Michael Norton and Elizabeth Dunn, found that when it comes to spending and happiness, doing with a little less is the key.

If you indulge yourself sparingly—thereby lowering your baseline spending, and increasing your potential pleaure each time you buy—you'll feel happier overall, they suggest.  

At the same time, invest in experiences rather than things. In other words, it’s better to cut back on clothes or electronics and save up for a vacation or spa day with friends. That’s because the money you spend will be more meaningful to you.

Or you could simply spend less: “Another scientifically validated means of increasing the happiness you get from your money is even more radical: not using it on yourself at all,” the authors say.

When their study participants were given $20 to keep or give away, the ones who gave it away felt much happier, a response that was fairly constant around the world and among different ages.

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...