Happy Money by Elizabeth Dunn and Michael Norton Happy Money: The Science of Smarter Spending by Elizabeth Dunn, Michael Norton
Narrator: B.J. Harrison
Published by Audible Studios on October 21, 2013
Source: Purchased
Genres: Psychology, Self-help, Personal Finances
Length: 5 hrs 29 mins
Pages: 224
Format: Audiobook
Buy on Amazon or Audible
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three-half-stars

Two professors combine their fascinating and cutting-edge research in behavioral science to explain how money can buy happiness—if you follow five core principles of smart spending.

Most people recognize that they need professional advice on how to earn, save, and invest their money. When it comes to spending that money, most people just follow their intuitions. But scientific research shows that those intuitions are often wrong.

Happy Money offers a tour of research on the science of spending, explaining how you can get more happiness for your money. Authors Elizabeth Dunn and Michael Norton have outlined five principles—from choosing experiences over stuff to spending money on others—to guide not only individuals looking for financial security, but also companies seeking to create happier employees and provide “happier products” to their customers. Dunn and Norton show how companies from Google to Pepsi to Charmin have put these ideas into action.

Along the way, Dunn and Norton explore fascinating research that reveals that luxury cars often provide no more pleasure than economy models, that commercials can actually enhance the enjoyment of watching television, and that residents of many cities frequently miss out on inexpensive pleasures in their hometowns. By the end of this “lively and engaging book” (Dan Gilbert, author of Stumbling on Happiness), you’ll be asking yourself one simple question every time you reach for your wallet: Am I getting the biggest happiness bang for my buck?

Happy Money was referenced in the Coursera class The Science of Well-Being, which is why I picked it up. From the class, I already knew the basics of what Happy Money was going to discuss, but it was still interesting and worth reinforcing. The authors are both professors and share a lot of their research, but they’ve tried to keep it enjoyable too, sharing amusing stories and funny tidbits. Its goal is to help readers learn to spend money in ways that will make them happier. It also touches on businesses and even countries and how they can help their employees/citizens become happier people.

Basically there are five principles.

  1. Buy experiences rather than material objects.
  2. Treat yourself. You enjoy things more if they are occasional treats, rather than everyday things. That one latte a week will make you happier than having one every day.
  3. Buy time. Consider how any given purchase will affect your time.
  4. Pay now, consume later. Waiting for things makes them more enjoyable and if you’ve prepaid, you don’t have to be worried about spending the money when you are enjoying the experience or treat.
  5. Invest in others. Spend money on other people, causes or charities.

It’s nothing earth-shattering, but it might make you take the time to think about how you’re spending money. Maybe buy a gift card for a restaurant you’ll order from later in the month. Maybe instead of driving through Starbucks, donating that 5 dollars to a charity like The Loveland Foundation. Happy Money is practical, with good advice and the information to back it up.

About Elizabeth Dunn

Elizabeth Dunn is an associate professor of psychology at the University of British Columbia in Vancouver, Canada. At age twenty-six, she was featured as one of the “rising stars” across all of academia by the Chronicle of Higher Education. Her work has been featured in top academic journals, including two recent papers in Science, and in hundreds of media outlets worldwide.

About Michael Norton

Michael Norton is an associate professor of marketing at Harvard Business School. His research has twice been featured in the New York Times Magazine Year in Ideas issue. In 2012, he was selected for Wired magazine’s Smart List as one of “50 People Who Will Change the World.”

Reading this book contributed to these challenges:

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