We could all use a little more money and a little more happiness, right? Recently, I had the pleasure of hearing Elizabeth Dunn speak about the science of happier spending at the XYPN Live conference. Dunn shared five key principles to get the most happiness from your spending and I was immediately hooked. I enjoyed her keynote so much that I purchased the book she wrote with Michael Norton, Happy Money: The Science of Happier Spending.


Are you getting the most happiness from your spending?


Five principles of Happy Money from Elizabeth Dunn and Michael Norton

  • Buy Experiences
  • Make it a Treat
  • Buy Time
  • Pay Now, Consume Later
  • Invest in Others

Are you getting the optimal happiness from your spending? You may be surprised by how many little things are adding to your happiness when spending money wisely. Or other areas, such as retail therapy, where you think you are getting huge benefits but no real money happiness in the end. What’s great about this book is that it isn’t trying to get you to stop spending money (we know you won’t) or convince you to make so-called “smarter financial choices”. Instead, the message is to spend money on things that will actually help bring you more joy in your life.

Having just returned from a three-week vacation, I realized my trip highlighted each of the five principles in one way or another.


Happy Money Tip – Buy Experiences like kayaking.


Happy Money Tip #1 – Buy Experiences

According to the book, happiness research shows that material things turn out to provide less happiness than experiential purchases. During my vacation, we had the opportunity to trek on a glacier, hike up a mountain, raft down a river and view incredible waterfalls. What could be cooler than that? While I enjoyed my hotel rooms, dinners, and flights, they aren’t likely to bring the lasting memories I will have from the other experiences.


Happy Money Tip- Make it a treat. Go wine tasting rather than just drinking a lot of wine.



Happy Money Tip #2 – Make it a Treat

Have you ever visited the top tourist destinations in your town? I’ll bet the answer is no. When something is always available people are less inclined to appreciate it. Look for ways to turn your favorite things into a treat again. This may mean cutting back on them for a while.

At the beginning of our trip, we fell in love with the Argentinian Malbec. A bottle of good wine was cheaper than a typical glass of wine here in Los Angeles. By the end of the trip, we no longer wanted to have a glass of wine with dinner. The treat of a nice bottle of wine was gone. I haven’t enjoyed a glass of wine since our return with the hope that in a week, or two, the next glass will be extra special. Hopefully, it will bring new happiness. Of course, that may just be the alcohol talking.


Happy Money Tip – Buy More Time. Hate cleaning? Pay someone to do it for you….freeing up time to do something better.


Happy Money Tip #3 – Buy Time

This might just be my favorite tip. We can all clean our houses, hand wash our cars and iron our clothes. But do we really enjoy it? If you do, more power to you. But I’m guessing you’d be happier buying back that time. Dunn and Norton assert you should outsource your dreaded tasks in order to have more time to follow your passions. If money is an issue, consider outsourcing things like cleaning the house so you can work more and earn more money to pay for the house being cleaned.

When you focus on time rather than money, you will likely choose more activities that bring happiness.


Happy Money Tip- Pay Now, Consume later. Relax the bill has already been paid.



Happy Money Tip #4 – Pay Now, Consume Later

Everyone reading this likely has a credit card, which means most of you buy now and pay later. Even if you pay your bill, in full, every month, you still owe money for all the things you enjoyed during the past month. According to Happy Money the Science of Happier Spending, you can reverse this process. “By paying up front and delaying consumption, you can buy more happiness even as you spend less money. Because delaying consumption allows spenders to reap the pleasures of anticipation without the buzzkill of reality, vacations provide the most happiness before they occur.”

While I agree that there is much happiness to be had planning and anticipating a vacation, I’m not quite willing to go so far as to agree that the anticipation of a trip is better than the vacation itself. All the same, there is more happiness to be had when you book a trip in advance and get to think of how amazing it will be for months and months.

My recent trip was planned in advance and most major expenses were paid in advance. This meant every time I checked out of a hotel (we stayed in six), we only received a bill for incidentals. Our transportation was prepaid so we saved time not having to use ride-hailing apps or taxis. Also, our excursions and activities were prepaid so we avoided potential hassles along the way. Another prepaying benefit was that I didn’t come home to a huge credit card bill. All of those things were paid for, in full, before the trip.


Happy Money Tip – Invest in Others. This may mean helping out a friend or volunteering.


Happy Money Tip #5 – Invest in Others

Research has shown that spending money on others provides a bigger happiness boost than spending money on yourself. A living and notable example of this is billionaire businessman Warren Buffet. Dunn and Norton quote Buffet regarding his decision to bequeath 99% of his wealth to nonprofit organizations and his response was, “I couldn’t be happier with the decision.”

While most of us will likely not bequeath 99% of our wealth to charitable organizations, we can still gain a lot of happy vibes by helping others. Throughout our trip, we had terrific guides, and knowing them personally made tipping much more enjoyable. I’m super frugal and hate spending money, but knowing that a little extra tip would go a long way for someone really made parting with money a bit less painful. Ok, it made me feel good.

Happy Money the Science of Happier Spending is available on Amazon. Read it if you would like to learn more about how to get the most happiness from your spending. Hopefully, the experience of reading this book will bring some joy into your life and perhaps a bit more money in your pocket. After you’ve read it, give it to someone who could benefit from reading it.

This article was written by David Rae from Forbes and was legally licensed by AdvisorStream through the NewsCred publisher network.

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Jarrod Merkel
Insurance Advisor
Merk Financial Group
Mobile : 604 816-2534