Three Ways to Get the Most Happiness for Your Dollar

If you found $20 on the ground what would you spend it on and why? (Get creative.)

Yesterday, members of The Motherhood team were asked this question during an event hosted by the Institute for Entrepreneurial Excellence, featuring Michael Norton, an associate professor of business administration at the Harvard Business School. Norton is a widely recognized expert on the behavioral economics of investment: how investing time, money and labor can influence the way people come to value things from products to personal relationships.

Norton shared surprising data on the many ways prosocial spending – or spending money on others, rather than yourself – can help you get the most happiness for your dollar, create happier employees and provide “happier” products for your customers.

Our favorite quote by Michael Norton from the event was: “Rather than collecting people, spend time connecting with people.”

Norton expanded on these concepts and how they can easily be applied in daily life, corporate HR and marketing campaigns:

Buy experiences, not things.

Experiences increase in value over time as we cherish the associated memories. When we personally make things, they become a source of happiness in our lives. This can be applied to marketing tactics as well – creating a great consumer experience leads to a higher perceived value. Norton drove this point home when he said, “It’s easy to compare stuff. It’s not easy to compare experiences. Therefore, with experiences, everybody wins.”

Do not underestimate the value of time.

Often, we value our time even more than money. Using time as currency, such as giving time back to employees as a bonus, can be just as valuable, create big rewards, and improve corporate morale.

Invest in others and in turn you are investing in yourself. 

Prosocial spending leads to a a higher perceived value of a dollar. Designate a set amount of money for employees/customers to donate to a charity of their choice on the company’s behalf, rather than the company designating a single blanket donation. This creates a higher sense of philanthropy spread throughout the entire organization.

There has been a shift in purchasing behavior as consumers focus on fulfillment through experiences, not things. In the marketing world, leveraging advertising campaigns to create experiences around products and brands is key in connecting with modern day consumers, which includes more than just millennials.

What are some ways you get more happiness for your dollar?