Is There Happy Money in Your Budget?

Don't Forget to Budget for Happiness

Money can't buy you love, but can it buy you happiness?

Yes, researchers say, it can. But not the way you think.

It isn't the stuff you buy, the fancy restaurants you visit or the exotic vacations that you take that bring true happiness, according to Harvard Business School professor Michael Norton. What brings happiness is spending money on others.

In other words, it's not how much money you have, it's how you choose to spend it that counts.

In a study published in the Journal of Science, Norton and his colleagues said that regular activities that lead people to spend as little as $5 on another person "may represent a promising route to lasting happiness."

"Supporting this premise, our work demonstrates that how people choose to spend their money is at least as important as how much money they make," the researchers wrote.

Norton and company suggest that in the corporate world, CEOs might want to get creative about how they encourage employees to spend their bonuses. Alternately, they suggest splitting up funds earmarked for charitable donations and letting employees have a say in how those dollars are spent.

So, even in these uncertain financial times, it makes sense to save room in your budget for more than the usual monthly bills. A few dollars dedicated to someone else may be an investment in your own happiness and well-being.