Can money make you happy? Try giving some away.

Posted on: December 6, 2017

By Sabine Lay

Charles Dickens wrote A Christmas Carol in 1843. Most people know the story of Ebenezer Scrooge, a miserly man who transforms his life after three spirits teach him the joy of giving. It seems Dickens was way ahead of the research on money and happiness.

Dr. Elizabeth Dunn, an associate professor of psychology at University of British Columbia, and Michael Norton, an associate professor of business administration at Harvard Business School, wrote an article in which their research shows that “people with a comfortable living standard are happier than people living in poverty.” No surprise. But once people reach a “comfortable standard” of income, which falls somewhere around $75,000 a year in the United States, additional income doesn’t create additional happiness.

In another report by Dr. Dunn, Norton and Dr. Lara Aknin from the department of psychology at Simon Fraser University, they write about what increases happiness, and it turns out that helping someone in need not only makes you feel happier, it can even improve your health.

Despite those findings, shopping frenzies like Black Friday and Cyber Monday perpetuate the myth that happiness is achieved by accumulating “stuff.” You could argue that Black Friday is about giving – that the purchases are often intended as Christmas gifts. But any meaning from that sort of giving is lost in the pushing, shoving and general atmosphere of greed that we often see during the holidays.

A more meaningful way to give, a new tradition, has taken root in the form of Giving Tuesday. This movement is founded on the ideals of giving and volunteering, which help others and strengthen communities, and as research shows, are the real foundation of increased happiness.

Giving Tuesday is intended to kick off a season of giving and the website offers many ideas and ways for businesses, schools, organizations, individuals and families to give back. Dickens would no doubt approve.

Why not test out the theory of happiness and giving for yourself? Make a donation of time or money to a charity or organization that is meaningful to you. If you have children, talk to them about giving back. Perhaps they could add some of their savings to your donation or make a small donation to a charity of their choosing.

Another option is to do volunteer work as a family; bake cookies for a seniors home or help at a food bank. Other ideas can be found on the Giving Tuesday Get Involved page.

If your finances and time are stretched now, here are a few other possible ways to give that will improve your mental frame of mind:

  • Donating stocks and bonds that you already own
  • Leaving a sum of money to a charity in your will
  • Establishing a charitable trust
  • Naming a charity as beneficiary on your life insurance policy

However you approach giving is an individual choice, but the effect of your gift can ripple far.


Category(s): Money Coaching, Relationship to money
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