Notes & Quotes: Happy Money by Elizabeth Dunn and Michael Norton

The following are my favorite quotes from Elizabeth Dunn and Michael Norton's Happy Money: The Science of Happier Spending.
  1. By focusing on how to spend the money you have rather than how to accumulate more of it, our perspective departs from the obsession with chasing increased wealth in the pursuit of happiness.
  2. The Principles:
    1. Buy Experiences
    2. Make It a Treat
    3. Buy Time
    4. Pay Now, Consume Later
    5. Invest in Others
  3. Uniting the five principles of this book is one simple premise. Before you spend that $5 as you usually would, stop to ask yourself: Is this happy money? Am I spending this money in the way that will give me the biggest happiness bang for my buck?
  4. People who spend more of their money on leisure report significantly greater satisfaction with their lives. 
  5. Experiences provide more happiness than material goods in part because experiences are more likely to make us feel connected to others.
  6. If you want to know whether your new girlfriend would rather stay at a beachfront Marriott or an ice hotel, take a look at her wristwatch. If her watch is slow, she's more likely to prefer the Marriott; if it's fast, she's more likely to prefer the ice hotel. When visitors to New York's Central Park were presented with this chioce, more than 70% of people with slow watches chose the Marriott, while more than 70% of people with fast watches chose the ice hotel.
  7. As the Roman philosopher Seneca put it, "Things that were hard to bear are sweet to remember."
  8. People are much more likely to experience buyer's remorse for material goods.
  9. Across a wide range of different types of experiences, you're likely to get the biggest bang for you buck if:
    1. The experience brings you together with other people, fostering a sense of social connection.
    2. The experience makes a memorable story that you'll enjoy retelling for years to come.
    3. The experience is tightly linked to your sense of who you are or want to be.
    4. The experience provides a unique opportunity, eluding easy comparison with other available options.
  10. Satisfaction with experiential purchases tends to increase with the passage of time, while satisfaction with material purchases tends to decrease.
  11. Sarah Silverman loves pot, porn, and fart jokes. But when it comes to indulging in these finer pleasures, the comic and former Saturday Night Live writer has a mantra: "Make it a treat." This epiphany came to her in the midst of her freshman year at New York University, when a friend found her in the midst of an extended pot bender and imparted some guru-like wisdom: "If you want to enjoy these things -- things like weed -- you have to make it a treat."
  12. Limiting your access to everything from the McRib to Maseratis helps to reset your cheerometer. That is, knowing you can't have access to something all the time may help you appreciate it more when you do.
  13. When couples do novel, exciting things together, the relationship itself feels novel and exciting.
  14. When it comes to chocolate and other treats, people may weigh economic considerations to an extent that few economists would condone.
  15. Time and money are frequently interchangeable.
  16. From diamonds to Double Downs to women at Star Trek conventions, scarcity increases value.
  17. According to the U.S. Census Bureau, Americans spend more than two weeks of the year commuting -- more than their typical annual vacation time...In addition to spending two weeks per year commuting, the average American spends the equivalent of two months per year watching television.
  18. In a sample of over one hundred thousand people from thirty-two European countries, individuals who watched more than thirty minutes of television per day were less satisfied with their lives than people who watched TV for under half an hour.
  19. When we are in the process of buying a new TV, we envision having friends over to watch the big game, or enjoying movies with the family. But we fail to consider what purchasing a TV actually does to our time. What we are buying is an implicit commitment to plunking ourselves in front of it -- often alone -- for one-sixth of the next year. If you thought of the purchase in these terms, would you think differently about this investment? What if you were buying one for your children?
  20. Because the lens of imagination focuses on the foreground of pool ownership (poolside parties! lazy Sundays!) while blurring the background details (clogged filters, long commutes), we suggest a simple exercise before making a major purchase: Thing about Tuesday. Take the time to consider what you'll be doing from morning to night this coming Tuesday. How will the purchase affect you on Tuesday? This simple exercise -- thinking about time use on a specific day -- helps us make less biased predictions about how much any one thing will influence our happiness.
  21. Time and money promote different mindsets. We view our choices about how to spend time as being being deeply connected to our sense of self. In contrast, choices about money often lead us to think in a relatively cold, rational manner.
  22. The ability to generate pleasant thoughts about the future is a hallmark of psychological health. What separates the suicidal from the rest of us is not an abundance of negative thoughts about the future, but rather an absence of positive ones. When healthy people find themselves in a funk, they tend to generate rosy visions of the future as a means of escaping their current malaise. Anticipating good things produces a distinct pattern of neural activation in the nucleus accumbens, a region of the brain linked to the experience of pleasure and reward. 
  23. If you're deciding whether to join friends on a trip to Hawaii, you can simulate this vacation in your mind in a matter of seconds. The degree of delight you feel provides a clue to guide your decision.
  24. Research shows that waiting can increase satisfaction if customers get the impression that work is being done on their behalf during the delay.
  25. When researchers asked thirty people to estimate their credit card expenses before opening their monthly bill, every single individual underestimated the size of their bill -- by an average of almost 30 percent.
  26. What we owe is a bigger predictor of our happiness than what we make.
  27. People view the distant future abstractly, prompting them to think about how desirable a particular course of action would be. They tend to focus more on feasibility when contemplating the immediate future.
  28. Three strategies designed to boost the impact of investing in others:
    1. Make it a choice.
    2. Make a connection.
    3. Make an impact.
  29. Since gift givers pay more to purchase presents, on average, than the recipients themselves say they would be willing to pay for the same items, economist Joel Waldfogel has argued that Christmas creates a "deadweight loss" of at least $4 billion within the United States alone.
  30. Think of your own prosocial spending budget in terms of levels of connection. You're likely to get the biggest happiness bang for your prosocial buck if you invest in others in ways that help you connect with people, especially people you care about.
  31. When prosocial spending is done right -- when it feels like a choice, when it connects us to others, and when it makes a clear impact -- even small gifts can increase happiness, potentially spurring a domino effect of generosity.
  32. Take a quick two-question quiz. What percentage of all the wealth in the United States do you think the richest 20 percent of Americans own? What percentage of the wealth do you think the poorest 40 percent of Americans own? Got your guesses? The answers: the richest 20 percent own around 85 percent of the wealth and the poorest 40 percent own approximately 0 percent. That's not a typo. The bottom two-fifths of Americans have vanishingly close to none of the country's total wealth, while the top 20 percent have nearly all of it. 
  33. In Denmark, ranked among the world's happiest countries, the Danish Holiday Act requires that workers get five paid weeks off each year, leaving the Danes with more time for experiences than people in countries such as the United States, which lacks a mandatory vacation requirement.
  34. Should governments ration how much chocolate we eat? It sounds crazy, we admit. Except that governments implicitly ration all kinds of products we consume, via taxation. Consider cigarette taxes: in 2011, Missouri had the lowest state cigarette excise tax in the United States -- just $0.17 per pack -- while New York's was more than twenty-five times higher, at $4.35 per pack. And as you might expect, taxes are related to consumption. New York has lower rates of smoking than Missouri, and in general, states with higher taxes tend to have fewer smokers.
Enjoy the quotes? Read the book!