Pay it forward: How money can buy you happiness

There are two very contrasting theories that we live with–you’d be better off if you made more money, and that money can’t buy you happiness. So, what is it really? Can money be equivalent to happiness?

According to a Harvard study the answer is both yes and no. It all depends on how you spend your money.

So, if you thought buying a television, car, house and another house can give you happiness, you may be wrong. The key to happiness is spending money on others. [Yes, you heard that right–OTHERS]

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In a series of experiments, Harvard found that simple acts of generosity can give you happiness. “Contributing to charity or buying gifts for friends and family - this is what makes most people happier than spending that same money on themselves,” notes the study.

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Recently, Warren Buffet, the man who advises people on wealth, donated 99 percent of his wealth to charity to enhance his emotional well-being.

But, we are talking about one of the richest men in the world. But does the theory even hold true for the common man who struggles to make ends meet?

The research notes that the theory may be relevant in poor countries like India and Uganda too. In fact, in a study they conducted,they found that asking people to spend as little as $5 ( Rs 300 at current exchange rate of 60 the the dollar) on someone else over the course of a day made them happier at the end of that day than people who spent the same money on themselves. The amount clearly doesn’t matter.

In fact, this theory is being applied to big corporate houses too. For example, Google, offers a compelling “bonus” plan for employees.

The company maintains a fund whereby an employee can nominate another employee to receive a $150 bonus. The amount is not much compared to the salaries that Google employees receive, but there’s more to this. The nature of the bonus - one employee giving a bonus to another rather than demanding that bonus for himself - can have a large emotional payoff, notes the research article. [Read the Harvard study here.]

So, next time why not just buy a book for a friend instead of buying it for yourself? You may just be more happy and you can obviously borrow it later !