Happy Money

Following a recent recommendation, I read Happy Money by Elizabeth Dunn and Michael Norton. The book explores the age-old question: can money buy happiness? The answer – in a nutshell – is yes, but it depends on how you spend it. According to the book which uses a mix of scientific studies and anecdotes to prove its point, things don’t make us happy but experiences and community do. Hardly anyone would argue with this conclusion, yet so many people don’t follow it in their own lives. Interestingly, this historic disconnect now seems to be converging. As evidenced by this book and several others, this topic is receiving more and more attention, which has the self-reinforcing effect of pushing it to the forefront of our consciousness and thus driving our behavior. As a millennial, I’d say we have latched on to this concept more than preceding generations (massive generalization).

The business implications are significant. Consumer preferences, housing and travel/commute patterns, as well as employee expectations and priorities are all rapidly changing in large part due to this trend. Whether you are running a consumer brand or a B2B software company, it makes sense to carefully consider how your business is aligned with this ethos, both internally (workplace culture) and externally (addressing customer desires).

Happy Money lays out five core principles for optimizing monetary spending for happiness. Below, I’ve included illustrative examples of how these principles could be applied in the business realm. To be clear, we are not giving blanket endorsement of these practices, but in the right circumstance they may have real merit. At the very least, they provoke good discussion.

Whether you buy into these ideas or not, it is hard to deny that consumer and employee preferences and behavior are changing rapidly, and largely in alignment with “Happy Money” values (again, you can mostly thank Millennials… for better or worse). It would serve business leaders well to consider these principles and how they are positioning their businesses for success in this context.