• Carole Meitler

Can Money Buy Happiness


‘Tis the season to be …giving. We can’t help but notice the more generous spirit we see during the Christmas season. Furthermore, in some cases a charitable gift can be a nice tax deduction as we come to the end of another year. In fact, according to Giving USA, Americans gave $449.64 Billion to charity in 2019. But have you considered some of the other benefits of giving? Many of us have heard the famous quote by Jesus found in Acts 20:35, “It is more blessed to give than to receive.” Interestingly, modern science sheds some light on the famous quote. We all know the good that can be accomplished by our giving (e.g., the hungry are fed, the sick received needed care, etc.). But did you know it is actually good for you to give?


4 Reasons Why it is Better for You to Give


1. It makes you happy.


We have all been told that “money can’t buy happiness.” As it turns out, money can buy happiness … when it is given away. Michael Norton, a professor at Harvard Business School, and his colleges Lara Aknin and Elizabeth Dunn at the University of British Columbia, discovered that people are happier when they spend money on others versus themselves.


Norton and his colleagues questioned 632 Americans. Their studies showed that increases in income do not increase happiness. In addition, it showed that those who reported spending more on others, also reported a higher degree of happiness.


In another test, they tracked how employees at a Boston-based company spent their profit-sharing bonus. After a series of questions, they discovered that those who spent a larger portion of their bonus on others had a higher level of happiness than those who spent more on themselves. Furthermore, the dollar amount of the bonus had no impact on their degree of happiness. “All that mattered,” according to Norton, “was the percent spent on others.”


Lastly, researchers gave students envelopes of $5 or $20 and they were told that they should spend it on themselves, to cover a bill, or others, to give a gift or donate to a charity. Those who spent the money on themselves were not any happier that evening. But those who used it for gift giving were.

A 2007 study published in the journal Science found that making charitable contributions elicit neural activity in the areas of the brain that are linked to reward processing. These are the same areas activated by pleasures like eating and social connection. Similar results have been observed in other studies as well where scientists also believe that the altruistic behavior of giving releases both dopamine and endorphins in the brain.


Interestingly, Sonja Lyubomisrsky, a happiness expert and professor of psychology at the University of California, Riverside, saw similar results when she asked people to perform five acts of kindness each week for six weeks.


2. It improves your self-esteem.


A 2012 study by University of Michigan psychologists Jennifer Crocker and Amy Canevollo showed that giving helps you quit focusing on yourself and boosts self-esteem. They noted that, “Nothing makes you more proud of yourself than knowing that you are making a positive difference in the lives of other people.” Researchers found that when you give to someone, your self-esteem stays elevated for months and possibly longer.


However, Crocker cautions that there is a catch, “If you start giving to people to get a self-esteem boost, it won’t work.” She suggests that you ask yourself, “Would I give even if I get nothing out of it?” Only then will your giving improve your self-esteem.


3. It improves social connection.


It is logical to think that when we give to others, they feel closer to us. However, it may be surprising to realize that giving to others makes us feel closer to them, too. In her book, The How of Happiness, Sonja Lyubormirsky writes, “Being kind and generous leads you to perceive others more positively and more charitably, and this fosters a heightened sense of interdependence and cooperation in your social community.”


Work by sociologists Brent Simpson and Robb Willer reveal that when you give to others you are more likely to be rewarded by others down the line. Exchanges of giving and receiving create positive interactions that strengthen our ties to others. The research showed that such connections are central to good mental and physical health.


4. It helps you live longer.


A significant amount of research has shown a link between different forms of generosity and better health, even for the elderly and those with chronic illnesses like HIV and multiple sclerosis, according to Stephen Post, a professor of preventative medicine at Stony Brook University. Additionally, the journal Health Psychology published a study in 2012 that found people who regularly volunteer live longer. Similar results were noted in various other studies.


Researchers noted that giving decreases levels of the stress hormone, cortisol. By giving to others of our time and money, we reduce our stress which in turn helps us live longer and healthier. In another study by Rachel Pifeir of Johns Hopkins University, it was discovered that people who provide support to others had lower blood pressure than participants who did not.


What Type of Gifts to Give


Most people think of either money or Christmas gifts this time of year. But it is equally valuable to give time, a listening ear, or an encouraging word. So even if you are short on funds this year, there is still plenty to give. Besides, who can put a price on the value of the love and kindness you share by giving in non-tangible ways?


Whatever you give, remember that giving is much more than a year-end tradition that benefits the recipient. It will also have great benefits for you personally, because it truly “is more blessed to give than receive.”

DISCLOSURE Information on this website and others should be used at your own risk. Past performance does not guarantee future results. Securities investments involve risk; returns in such investments vary and may involve gain or loss. The materials and content herein are not a substitute for obtaining professional tax, personal financial planning, or other relevant financial advice from a qualified person or firm. For full disclosure click on the disclosure link at the bottom.

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