The 3 Things the Happiest People Spend Money On

Flat illustration of a smiling person choosing between three glowing paths: an airplane and concert tickets for experiences, a clock for saved time, and a gift box for giving to others, on a deep blue and teal background

The short answer: Research by Elizabeth Dunn, Michael Norton and Thomas Gilovich points to three things the happiest people spend money on: experiences over material possessions, time-saving services, and spending on others instead of themselves. Dunn and Norton showed in a 2008 Science paper that prosocial spending beats personal spending for happiness. Gilovich's work at Cornell shows experiences beat possessions. And Whillans, Dunn and colleagues (2017) showed buying time lifts happiness at every income level. The effects are modest and still being refined, but the direction is consistent. And the finding asks an uncomfortable question for anyone in marketing: we mostly sell the category with the weakest happiness return.

The research behind it

Three researchers, three lines of evidence.

Elizabeth Dunn (University of British Columbia) and Michael Norton (Harvard Business School) ran the prosocial spending studies with Lara Aknin: a national survey, a company bonus study and a randomized experiment, published in Science in 2008 and expanded in their book Happy Money: The Science of Happier Spending. Thomas Gilovich of Cornell spent two decades on the experiences-versus-possessions question (Van Boven and Gilovich 2003; Carter and Gilovich 2010; Kumar, Killingsworth and Gilovich 2020). Ashley Whillans, Dunn, Smeets, Bekkers and Norton (2017) added buying time: people who spend money to save time report greater happiness, regardless of income.

Now the honest caveats, because a serious article should not oversell the science. The effects are small. Buying time lifted happiness by about 0.77 on a 10-point scale. A 2022 close replication of the original prosocial-spending experiment did not find a statistically significant effect, though broader cross-cultural work has been supportive. The fair summary is: promising, modest, and still being tested. That does not make it wrong. It makes it science.

1. Experiences over things

This is Gilovich's territory, and it is the most replicated of the three.

The reason is not that a trip is morally better than a television. It is that the human brain treats them differently. Material things trigger adaptation: the new phone is thrilling for a week, then it is just your phone. We also compare possessions constantly. Gilovich's own example: you buy a flat-screen TV, visit a friend with a bigger one, and yours feels smaller. Experiences resist both traps. A vacation is harder to compare ("your Caribbean trip was better than mine" bothers you far less than the TV comparison), and memories get sweeter with time. Even a bad experience becomes a good story.

The research adds three more reasons experiences win: they are inherently social (you usually do them with people), they become part of your identity ("I am someone who has hiked that trail"), and people actually enjoy hearing about your experiences while they get bored hearing about your possessions.

My provocation for marketers: almost all advertising sells things. The category with the weakest long-term happiness return is also the most heavily advertised category on earth. Sit with that for a minute.

2. Buying time

This one stings, because almost nobody does it.

Whillans and colleagues found that spending money to save time, housecleaning, grocery delivery, a virtual assistant, outsourcing the chore you dread, correlates with higher happiness at every income level. The mechanism is simple: it buys back hours you can reinvest in the parts of life that actually matter to you.

And yet only about 28% of people surveyed spent money this way, averaging around $148 a month. Most people view paying someone to clean their house as indulgent. The research suggests it is closer to essential.

Why do we resist it? Because we cannot see the trade. We see the $200 leaving the account. We do not see the four drained Sunday afternoons it would have cost. Founders and freelancers should hear this one loudest: your scarcest resource is not money, it is focused hours. Every hour you spend on a chore a $20 service could do is an hour you did not spend on clients, product or rest.

3. Spending on others

Dunn, Aknin and Norton's 2008 work is the famous one: across a national survey, a company bonus study and a randomized experiment, people who spent money on others, gifts, donations, covering someone's meal, reported greater happiness than people who spent the same money on themselves.

Two details make it more interesting. First, the amount barely mattered. Spending $5 on someone else in a day produced a measurable lift. Second, it was the relative share of spending on others, not the absolute amount, that predicted happiness. You do not need to be wealthy. You need to redirect a few dollars.

The replication record here is the messiest of the three, which I will not hide: one close replication failed to find the effect, while larger and cross-cultural replications found small positive effects. Treat it as a real but modest force, not a magic trick.

Infographic of the 3 happiness spends: experiences over things like trips concerts and dinners, buying time like housecleaning and delivery, and spending on others like gifts and giving, with a note that material goods give a spike that fades

The uncomfortable question for marketers

Here is the part that should make every marketer uncomfortable.

The three categories that produce the most happiness, experiences, time, and giving, are the three categories that advertise the least. Nobody runs a Super Bowl ad for "a quiet dinner with people you love." Meanwhile, the category with the weakest happiness return, material goods, gets trillions in ad spend. Marketing, as an industry, is mostly in the business of selling the thing the science says matters least.

That does not mean product marketing is unethical. It means the smartest marketing already knows this and sells accordingly. The best ads do not sell the product. They sell the experience the product unlocks, the time the service gives back, or the gift the purchase becomes. Travel brands sell memories, not seats. Meal kits sell weeknights back, not groceries. Jewelry brands sell the moment of giving, not the metal.

So the provocative question for my marketing students: are you selling the thing, or are you selling the happiness category it belongs to? If your ad could be swapped to sell a competitor's identical product, you are selling the thing. If it sells an experience, an hour back, or a generous gesture, you are selling what the research says people actually want.

Audit your own spending

Here is a challenge worth taking: audit your last month of spending against these three categories.

Pull up your bank statement. Tag each purchase: experience, time-saver, gift or giving, or none of the above. Then look at the gap between where your money went and where the research says happiness lives. Most people find the gap embarrassing. I did.

You do not need to overhaul your life. The research suggests small redirects work: move one dinner budget from a gadget fund to a trip fund, buy back two hours a week, spend $20 on someone else this week. The core claim holds in its modest form: it is not about having more money. It is about pointing the same dollars at categories that produce lasting well-being instead of a dopamine spike that fades by next week.

My take

I find this research hopeful and slightly damning at the same time.

Hopeful, because it says happiness is more available than we think. You do not need a raise. You need to spend the money you already have on a dinner with friends instead of another gadget, on two hours of your Sunday back instead of a deeper clean you resent, on a small gift instead of a slightly nicer version of something you own.

Damning, because it exposes what most of my industry does all day. We are very good at manufacturing desire for the category with the weakest return. The marketers who will win the next decade are the ones who figure out how to sell experiences, time and generosity, the things the happiest people are already buying. The science has been sitting there since 2008. We just preferred the louder brief.

Frequently asked questions

Who are the researchers behind this?

Elizabeth Dunn and Michael Norton (prosocial spending; the book Happy Money), Thomas Gilovich of Cornell (experiences versus possessions), and Ashley Whillans, Dunn and colleagues (buying time). One note: this research sometimes circulates online with Gilovich's first name wrong. It is Thomas.

Does this mean money can buy happiness?

Partly, and that is the precise claim. Having more money barely moves happiness past a point, but how you spend what you have matters. The research says redirecting existing spending toward experiences, time-saving and giving produces measurably more happiness than spending the same amounts on yourself and your possessions.

Is this just advice for rich people?

No, and that is one of the strongest parts of the evidence. The prosocial spending effect showed up with as little as $5, and it was the share of spending on others, not the absolute amount, that predicted happiness. The buying-time effect held across income levels. None of this requires wealth. It requires reallocation.

If the science is real, why doesn't everyone spend this way?

Because the trade is invisible. You see the price of the house cleaner; you do not see the drained weekend it replaces. You see the cost of the trip; you do not see the adaptation that will eat the gadget's joy in a month. We are wired to notice spending and blind to the happiness returns. That is exactly why the audit exercise matters.

Are ads for material products unethical then?

I would not go that far. People need things, and good products deserve marketing. The sharper point is about framing: the most effective product marketing already sells the experience, the time saved or the giving moment, not the object. The ethics question is for lazy marketing that sells pure status and comparison, the exact mechanism Gilovich showed undermines happiness.

How do I actually audit my spending?

Open last month's bank or card statement. Tag every discretionary purchase as experience, time-saver, gift or giving, or none of the above. Add up the shares. Then pick one redirect for next month: one experience you will book, one recurring chore you will outsource, one person you will spend on. Small, specific, scheduled. That is the whole practice.

The bottom line

The happiest people spend on experiences instead of things, on buying back their time, and on other people. The research behind it is real, modest in effect size, and still being refined. But the core is consistent, and it leaves marketing with an uncomfortable mirror: we spend our careers selling the category with the weakest happiness return. The opportunity is to sell the other three. Audit your spending, redirect a little, and see if the science holds up in your own life. My bet is that it will.