My 3-step millennial method to buying happiness
Naturally, money advice always revolves around the topics of saving money, making money and putting our cash to work. But why does the grey-haired wealth manager NEVER tell us to give a percentage of our income to a cause we feel strongly about? Thats because they are wired to provide the following advice:
MONEY x MORE MONEY = LONG-TERM HAPPINESS
Michael Norton of Harvard Business School talks about something called ‘pro-social’ spending. This encapsulates the link between spending money on others and our personal wellbeing. In 2008 he conducted a study where he gave 46 participants either $5 or $20. He told some individuals to spend it on themselves whilst made others give it away. He recorded their self-reported level of happiness both before and after the experiment...
**The punchline** - those who gave their cash away showed a greater increase in their wellbeing vs the individual who spent all of the money on themselves.
The art of giving causes our happiness hormones to run wild and enables us to provide something of value to another human being. Studies across the world have noted that after a certain level of monetary wealth, our happiness increases in smaller doses and in most cases it actually does ZERO for our mental wellbeing. It's not that I don't want you to enjoy your guilt free spending, I just want to create some self-awareness around it. That feeling of euphoria you get from buying your dream car is often short-lived - before you know it you will have reverted back to your 'base-level' of happiness. However, the small victory through 'giving' can inspire us to change the way we think about money, whilst provide perspective on our own financial woes.
So money doesn't automatically extinguish our life problems?
As we all know, millennials value experiences over 'things'. Sooooo, since we value experiences over materialistic goods, can the experience of giving enable us to be happier than any other generation for years to come? Okay, maybe that’s a long-shot, however, check this strategy out for increasing the happiness hormones inside you TODAY.
Choose one of the following 2 percentages:
- 0.25% (for the beginners) or 0.50% (for the pro). You can always opt for more, however, these two stages are your foundation.
Let’s assume you chose 0.50%. This is the percentage of your NET monthly income you will be donating.
Why is this percentage sooo tiny? If I were to change this to 2.5% and 5% of your monthly income, this would scare the living daylights outta you. It's all about the psychological win. In reality, you can choose whatever percentages you like, however, in this case size really doesn't matter....it's about starting!
- If on payday you take home £1,800 after the annoyance of tax, then 0.50% of your salary would be £9 a month (0.50% x £1,800). This is the exact amount of money you will give away every single month.
Choose the charity you wish to donate too - it has to be something which plucks on those heart strings and something you can quantify.
- This makes it clearer for us to visualise the positive impact, whilst it gets those happiness hormones firing!
These 3 steps alone won't create financial content overnight, however, it could be the nugget of inspiration you need to change the way you think and feel about money. You can't afford it you say? You have student debt you say? I hear ya, however, here is some perspective...
Last year it was noted that around 1/4 of UK households now subscribe to Netflix. Given the above example, if you were to spend £9.99 on Netflix's premium plan, this is still MORE than 0.5% of your monthly take home pay...
Would you spend £9 to buy your monthly fix of the happiness hormone?