#readxp Happy Money the science of smarter spending | Service from Heart: #readxp Happy Money the science of smarter spending

Monday, 17 February 2014

#readxp Happy Money the science of smarter spending

Book title: Happy Money: The Science of Smarter Spending
Author(s): Elizabeth Dunn (University of British Columbia / UBC, Vancouver, Canada) and Michael Norton (Harvard Business School)
Publisher: Simon & Schuster

Summary:
Liz and Mike proposed 5 main strategies or principles on spending money that can enhance our happiness, based on their and others' psychological research studies.

happy money ServicefromHeart Elizabeth Dunn Michael Norton book review

Buying experiences (e.g. trips, adventures, concerts, special meals) brings more happiness than buying material things (e.g. IT gadgets, cars, houses, swimming pools) does. Unlike material things that undergo depreciation in values, our past experiences get better when we re-think and re-feel about them.

Their suggestions to (1) turn our favorite things into treats (e.g. instead of having a cup of Starbucks coffee every morning, limit our access to perhaps a cup Starbucks coffee once in a while) and (2) pay now , consume later (as opposed to credit culture of consume now, pay later), appear to me deeply rooted in delayed gratification. It is in the delay that human beings enjoy the pleasures of anticipations, such as planning for trips.


Ideas / Inspirations:
♥ Thinking about money (that we don't have at the moment) can discourage us from taking actions that promote happiness.
♥ People will think that an irrigation pump costing $250 is expensive, but Kickstart phrases it beautifully to appeal to our nobler motivation. "You give us $250, and we'll get a family our of poverty - forever."
♥ Giving money away can create wealth e.g. Pepsi Refresh Project grants.
♥ To be happier, watch less TV, spend more time (if necessary buy time) to play with our children or walk our dog. Consider how a particular purchase will affect our time.
♥ Many people sacrifice much of their time in efforts to save a little money, for example through comparison shopping (this effort in turn can influence us to pay more for features that do not bring happiness).
♥ Invest in others brings happiness only if we are not feel pressured or compelled to give.
♥ Relationships and connections matter. For example, Better World Books create connections between donors and recipients. Consequently, they have happier donors.  
♥ Giving our children and ourselves treats instead of daily consumption of our favorite things may boost happiness. I am going to try this principle on baby Ren with his favorite strawberry!

Questions:
1. Since the findings of the books (e.g. the authors proposed that people are happier spending money to purchase experience than material things) are based on averages or majorities of responses, this does not mean that everyone will have the same preference. Ask ourselves, especially for large amount purchases, will we be happy 1 week, 1 month, 1 year after spending money in exchange of a particular experience or a material thing? 
2."Who makes us happier, our significant others or strangers?"
3. What is our happy ratio of "money spent on ourselves" over "money spent on others"?  Based on a study quoted in the book, > 600 Americans report an average ratio of > 10 to 1.

Quotes:
♥ "Some 57 percent of Americans reported that the experiential purchase made them happier than the material purchase, while only 34 percent reported the opposite."
♥ "When undergraduates wrote a summary of their "life story" (at the tender age of approximately 19), they were more likely to mention experiential purchases, rather than material goods."
♥ The chef Ferran Adrià has a goal to turn "eating into an experience that supersedes eating."

Other reviews / interview that I appreciate:
♥ Goodreads' members' reviews
How money actually buys happiness at Harvard Business Review
♥Chuck Sambuchino's interview

Visit also other #readxp posts.

With love,
ServicefromHeart
20140217