Does Spending Money on Others Make You Happier?

Imagine being approached on a university campus and handed an envelope. Inside is either $5 or $20. There is one condition: you must spend it by the end of the day. Some people are told to spend it on themselves, on a bill or a treat. Others are told to spend it on someone else, as a gift or a donation.

That evening, the researchers ask everyone how happy they feel. The people who spent the money on others report being happier. The amount in the envelope makes little difference. What matters is who it was spent on.

This experiment, by Elizabeth Dunn, Lara Aknin and Michael Norton, was published in the journal Science in 2008 and became one of the most quoted findings in happiness research. It is worth looking at carefully, because the full story is more interesting, and more modest, than the headline.

What the original study found

The 2008 paper actually had three parts. First, a nationally representative survey of 632 Americans: people who spent more of their income on others, through gifts and donations, reported greater happiness. Second, a small field study of 16 employees at a company in Boston who received a profit-sharing bonus averaging about $5,000. Those who spent more of it on others were happier afterwards. Third, the envelope experiment described above, which was the part that allowed a causal conclusion, because people were randomly assigned to spend on themselves or on others.

Taken together, the three approaches pointed the same way. But the survey was correlational, the bonus study was tiny, and the experiment involved students spending small sums on a single day.

Is it just a Western thing?

An obvious question is whether this is a quirk of wealthy North Americans. In 2013, Aknin and colleagues looked at survey data from 136 countries and found that spending money to help others was associated with greater happiness in poor and rich countries alike.

They also ran experiments. In Canada, Uganda and India, people who were asked to remember a time they spent money on someone else reported feeling happier than people asked to recall spending on themselves. In Canada and South Africa, participants were randomly assigned to buy the same items either for themselves or for a charity, and those who bought for the charity reported more positive feelings, even though the purchase created no chance to build a social connection.

There is even evidence from before children can talk properly. In a 2012 study, Aknin, Kiley Hamlin and Dunn found that toddlers under two looked happier when giving treats to a puppet than when receiving treats themselves, and happier still when the treat they gave away was one of their own.

How big is the effect, really?

Many of the early studies had small samples, which is a warning sign in psychology. So in 2020 Aknin, Dunn and colleagues did something admirable: they ran large, preregistered replications of their own key experiments, with the analysis plan fixed in advance.

In the first, 712 students were randomly assigned to buy something for themselves or for a stranger in need. Those who spent on the stranger reported greater happiness right afterwards. In the second, 1,950 adults were asked to recall spending money on themselves or on someone else, and this time there was no difference in happiness. In a third, redesigned version with 5,199 people, recalling generous spending did make people happier, but the difference was small.

The authors concluded that spending on others does promote happiness, but that how much depends heavily on how the study is done. That is a more honest conclusion than the one most popular articles repeat, and it is the one worth keeping.

Another way money can buy happiness

Spending on others is not the only purchase that seems to help. In 2017, Ashley Whillans and colleagues, including Dunn and Norton, surveyed 6,271 people in the United States, Canada, Denmark and the Netherlands, including a sample of 818 Dutch millionaires. People who paid to outsource disliked chores, such as cooking, shopping or household maintenance, reported greater life satisfaction, and the effect held across income levels.

They then ran an experiment with 60 working adults in Vancouver. On one weekend, participants spent $40 on something that saved them time. On another, they spent $40 on a material purchase. They reported more positive feelings at the end of the day after buying time. Yet when another 98 working adults were asked how they would spend a $40 windfall, only 2% spontaneously mentioned a time-saving purchase.

What this does and does not mean

It does not mean that giving money away will transform your life, or that you should give beyond what you can afford. The effects in the largest studies are real but small, many of the measurements are about mood on the same day, and survey links cannot show which way the causation runs: happier people may simply give more.

It does mean that the question of how you spend money deserves attention alongside how much you earn. Across many countries and methods, small acts of generosity reliably produce a lift in mood, even if it is a modest one. If money worries are causing you serious stress, advice from a qualified financial or debt counsellor will help far more than any happiness study.

What this means for you

A few practical ideas follow from the evidence.

• Small is enough. In the original experiment, $5 worked about as well as $20. You do not need a grand gesture.
• Make the impact visible. Buying something concrete for a specific person or cause seems to feel better than an abstract donation you never think about again.
• Count time as well as money. Paying to skip a chore you hate, when you can afford it, is not selfish. It may give you back hours you can spend on people.
• Notice your own blind spots. Only 2% of people asked about a windfall thought of buying time, so good options are easy to overlook.

If you want to look at your own giving side, our altruism test and volunteer motives test explore why and how you help others, and the happiness test gives you a snapshot of where you stand today.