Spend on others to feel happy

Nigel Latta explains why giving money away feels good.

The old saying is that money can’t buy you happiness, but it kind of can. Mostly, money buys you relief from stress. If you’re working 16-hour days and struggling to pay the bills, then money would buy you a shedload of happiness.

But getting more money doesn’t raise your base level of happiness. People quickly acclimatise to their new level of wealth.

You can see that in your own life. When you first get something new – a watch, a coffee table, anything – it’s kind of cool, but after a bit, it’s just a watch, it’s just a coffee table.

That acclimatisation is why things-based happiness doesn’t work.

What does work is spending money on experiences – and they don’t have to cost a lot of money.

It’s not like the only way to have experiences is to take your children to Paris. You can just go down to the park and kick a ball around.

Most people, if they look back on their childhoods, don’t remember things, they remember experiences.

If you want your money to make you happier, consider spending some of it on other people.

We did an experiment for the Mind over Money TV series. . We told some people to spend $20 we gave them on themselves. Others were told to spend the money on other people. Then we asked them to rate how happy spending the money had made them.

If we were economically rational, spending money on ourselves should make us feel better.

But the people who spent it on others on average rated their happiness nine out of 10. Those who spent the money on themselves rated it 6.75.

One of the ways I think about that is in terms of evolutionary psychology.

About 3.9 million years ago the rest of the primates went with fighting and shagging. We went with monogamy and cooperation and living in social groups. So it makes evolutionary sense that it feels nice to cooperate with, and help, other people.

Materialism and accumulation of things can, however, make us feel greedier and more entitled.

As you become wealthier, you have people to keep the world at bay and do things for you, and you might lose empathy.

Acquiring more money doesn’t really change your level of happiness. You’re still you, just with more money. But how you spend it, and what you spend it on, can make a difference. Mind Over Money, Monday 8pm TVNZ 1, or catch up OnDemand