The last two principles from the book Happy Money are PAY NOW, CONSUME LATER and INVEST IN OTHERS.
The Joy of Waiting
Businesses recognize this psychological phenomenon, which has driven the development of financial and technological innovations that enable people to consume sooner and pay later. By putting this fundamental principle into reserve, you can buy more happiness while spending less money.
Happy Money, Elizabeth Dunn and Michael Norton
Technology has made it possible to get things in an instant. Online shopping can now provide same-day delivery. Digital products can be downloaded in a few seconds. Credit cards let us consume now and pay later.
The authors recommend the opposite instead – PAY NOW, CONSUME LATER. By delaying consumption, you can increase the happiness of what you have purchased.
But not all purchases can be delayed. The authors provides these guidelines on when a delayed consumption will translate into more happiness.
- When the delay provides an opportunity to develop positive expectations while waiting. For many kids, the joy of anticipating the time they can open their gifts on Christmas outshines the joy of having the gift itself.
- When the delay makes you “drool”. The drool factor increases the pleasure once the actual consumption takes place.
- When the delay is longer the the time to consume it. Most brides find the months of preparation for the wedding more exciting than the wedding ceremony itself.
By making purchases that we consume later, it can be easier to choose things that we know are good for our own well-being.
Happy Money, Elizabeth Dunn and Michael Norton
The benefit of paying now, consume later is not easily felt. In fact, we often feel the pain if we pay now. The hidden wisdom in this principle is how it discourages us from accumulating debt. How much our debt is is a big predictor of happiness than how much we earn. “In Britain, households with more debt exhibit lower happiness.”
It is better to give
If you have been focusing on trying to make more money, remember that giving some of it away can be just as rewarding as getting more of it.
Happy Money, Elizabeth Dunn and Michael Norton
New research shows that spending even small amounts of money on others can make a difference for our own happiness. In some researches, when people invest in others, the happier they were.
The authors give three strategies to boost the impact in investing in others.
- Make It a Choice. People feel better when the giving is their choice rather than when they feel they had to give or were forced to give.
- Make a Connection. You’re more likely to get more happiness when the giving helps you connect with people, especially with people you care about.
- Make an Impact. The more you see the impact of your giving, the more happy you feel.
The benefits of giving your money are surprising. It can make you physically healthier, and even make you feel financially wealthier.
Just as being able to give time away makes us feel we must have a lot of time to spare, giving money away makes us feel that we must have a lot of money.
Happy Money, Elizabeth Dunn and Michael Norton
Happy Money Book Summary
Part 1 | Part 2 | Part 3 | Part 4 | Part 5
