If money doesn’t make you happy, then you probably aren’t spending it right

Giving mainly makes the beneficiaries happy: When donated to the most cost-effective charities, a mere $7,500 demonstrably saves a human life*. Fortunately, giving tends to make the givers happy, too: Psychological research suggests that charitable giving ranks among the best forms of self-regarding spending as well. Here’s an example paper from the Journal of Consumer Psychology:

«The relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. Drawing on empirical research, we propose eight principles designed to help consumers get more happiness for their money. Specifically, we suggest that consumers should

(1) buy more experiences and fewer material goods;
(2) use their money to benefit others rather than themselves;
(3) buy many small pleasures rather than fewer large ones;
(4) eschew extended warranties and other forms of overpriced insurance;
(5) delay consumption;
(6) consider how peripheral features of their purchases may affect their day-to-day lives;
(7) beware of comparison shopping; and
(8) pay close attention to the happiness of others.»

Skeptical and still worried that giving unusually high amounts to charity would be drudgery after all? If so, approach this open question just like you’d rationally approach any other open question: in an evidence-based, experimental way. Test it! Set a time limit and try giving until that time. Then reevaluate and see whether the data gathered enables you to make a more permanent decision.

* The first version of this post stated that one could save a life for $3,500. Since the publication GiveWell have revised their estimates.

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