Book:  Happy Money

Author:  Elizabeth Dunn & Michael Norton

Purchase:  PrinteBook | Audiobook

Citation:   Dunn, E. & Norton, M. (2013). Happy money : the science of smarter spending. New York: Simon & Schuster.

Three Big Takeaways:

  • Once people move into a bigger, better house, their satisfaction with their house increased substantially, but their satisfaction with their lives - their overall happiness - didn't improve at all. If the largest material purchase most of us will ever make provides no detectable benefit for our overall happiness, then it may be time to rethink our assumptions about how we use money. (pg. 2)

  • People who spend more time on leisure (trips, movies, sporting events, gym memberships, etc.) report significantly greater satisfaction with their lives. These experiences provide more happiness than material goods in part because experiences are more likely to make us feel connected to others. (pg. 6)

  • There is a concept of capturing the experience of deriving pleasure in the presents from anticipating the future. This period provides a source of pleasure that comes free with purchase, supplementing the joy of actual consumption. Vacationers exhibit a bigger happiness boost in the weeks before their trip, rather than in the weeks afterward. (pg. 80)

 

Other Key Ideas:

  • In the US, once people/families earn around $75,000 per year (or $82,000 in 2019) making more money has no impact on their day-to-day feelings of happiness. (pg. XIV)

  • The length of an experience has little impact on the pleasure people remember from deriving it. For example - whether a trip is 4 days or 14 days, the duration of the trip has no bearing on the overall feelings about the trip. (pg. 21)

  • Providing employees with experiences, rather than cash-based rewards, has a much bigger impact on the organization. Furthermore, it can help attract and retain customers and employees. (pg. 22)

  • Material possessions become part of the background; Experiences just get better with time. (pg. 24)

  • There is no relationship between the Blue Book value of a car and the amount of enjoyment a an owner gets from driving a care once the novelty wears off. Novelty attracts the spotlight of attention, focusing our minds and exciting our emotions. But once we get used to something, the spotlight moves on. (pg. 29)

  • When we know something won't last forever, we're more likely to savor it. Knowing that something won't last forever can make us appreciate it more. (pg. 36)

  • While generally people report they are "busier than ever", time studies indicate that people in the United States spend about four hours more per week engaging in leisure than they did in the 1960s, while work hours have remained relatively constant. (pg. 57)

  • Americans spend more than two weeks of the year commuting. Taking a job that requires an hour-long commute each way has a negative effect on happiness. Individuals who have long commutes are much less satisfied with their spare time. (pg. 64)

  • The average American worker will work five hundred hours a year - two hours out of every day - just to pay for their cars. (pg. 64)

  • The average American spends two months per year watching television. However, studies indicate that people experience less pleasure while watching TV than while engaging in more active forms of leisure. (pg. 66)

  • People experience the most positive moods of the day while spending time with friends and family. Playing with children produced more positive feelings than almost any other common daily activity. (pg. 67)

  • According to the US Dept. of Agriculture in 2013, raising a child costs as much as $13,830 a year (or $15,203 in 2019). (pg. 68)

  • Differences between products seem much more important when we compare products side by side. This will tempt us to pay more for additional/upgraded features. The truth is, only when a product falls below a certain threshold of quality will it affect our happiness. (pg. 72)

  • The widespread pattern of consuming now and paying later can be counterproductive for happiness. Instead, you'll get more happiness for your money by paying now and consuming later. (pg. 80)

  • Spending even small amounts of money on others can make a difference for our own happiness. Studies have shown that individuals who spend money on others are measurably happier than those who spend money on themselves. The more people spend on others, the happier they feel. The effect of the "charity" spending category is as large as the effect of income in predicting happiness. (pg. 107)

  • According to one Gallup World Poll, donating to charity had a similar relationship to happiness as doubling a household income. (pg. 113)

  • Giving money to others can make you physically healthier, and make you feel financially wealthier. Individuals who provide money and other forms of support to relatives report better overall health. (pg. 124)

  • Consider spending 10% of your take home pay on others. (pg. 133)

  • The average 100k household spends the following per month: $2750 on housing, $1250 on transportation, $900 on personal insurance/pensions, $600 on groceries, $400 on restaurants, and $250 on donations. $250/month would be only 3% of their take-home income. You'll notice that the largest two categories - housing and transportation - are not particularly good sources of happiness. While the category where people report spending the least is an excellent source of happiness. (pg. 136)

  • People in countries with higher taxes are happier than those in countries where taxes are lower. The US has lower income taxes than many similar countries. Top earners in the US paid a tax rate of 35% in 2011, compared to 50% in the United Kingdom and 52% in the Netherlands. On the other hand, Americans are known for their charity, as 65% of Americans reported donating money to charity in 2011. (pg. 153)

Copyright © 2019 by Dr. Jared Smith LLC.  Specializing in Leadership, Education, and Personal Growth.