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Happy Money

In my previous blog, I shared some of the virtual activities that have brightened my day since Covid began, including several offerings through Coursera, an online library of courses from universities and companies. In one of these courses, I was introduced to the book Happy Money: The Science of Happier Spending by Elizabeth Dunn and Dr. Michael Norton, a delightful twist on the ever-present suggestions on how to save, save, save. It presents research on the science of spending and explains how you can generate more happiness with your money.

“We have taken our work “under the skin” demonstrating that everyday spending choices unleash a cascade of biological and emotional effects.” Author Elizabeth Dunn

Happy Money helps us understand the emotional issues of spending. The authors’ research and principles are explained in five accessible chapters.

The first principle is “Make it a Treat,” for example, eating at a favorite luxury restaurant. Even if you can afford to eat like this each day, you will find it more enjoyable if you save it for celebrations or occasional visits. The theory explains that you enjoy a treat more when it is less frequent. I loved the story about the 5-star chef and his love of food from a street vendor.

The second principle is that money spent on services or experiences can be more enjoyable than money spent on things. Someone who finds housekeeping difficult may think money is well spent on delegating the task. The same might be true for someone who does not enjoy cooking and pays another to do this for her/him.

Another guideline stated in this book is “Pay Now, Consume Later.” This principle will motivate you to ignore a “buy now, pay later” advertisement. The book relates that we actually find more happiness in saving for needs, paying cash, or paying ahead to enjoy something later, much like the old envelope budget system. After reading this theory in the book, I realized why I enjoyed my vacations on cruises and prepaid trips.

The final principle is giving to others. The science suggests that spending as little as $5.00 on others can bring a feeling of well-being. Gain even more happiness from a planned giving program. At HTG Investment Advisors, we can help you establish a donor-advised fund (DAF) to efficiently structure a multi-year giving strategy. A DAF may also allow you to give more money to vetted charities and creates an efficient reporting system at tax time.

I thoroughly enjoyed Happy Money: The Science of Happier Spending, and I think you will too. Read this slim book, and a light will shine in your brain.

Jeanne Gnuse

Jeanne is a co-founder of HTG Investment Advisors Inc. She oversees the firm’s client communications, marketing, and community relations functions. Jeanne is the mother of three children and grandmother to seven. She loves helping others learn money value lessons.

Jeanne received her BS from the University of Dayton and pursued graduate studies at Ohio State University.
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