Saturday, 12 December, 2009 1:39 PM
How to Increase
Happiness Without Increasing Spending
Expert
Reveals It’s Not About The Money – And It Never
Was
Cover
photo: www.greenleafbookgroup.com
How
Much Is Enough? by Arun Abey & Andrew Ford
|
Arun
Abey believes the Beatles had it right.
“Money can’t buy you love, or happiness, but how
we use it – and if we can learn to use it less –
can pave the way for a happier life,” said Abey, author
of How Much Is Enough? (www.howmuchisenough.net).
“The secret is to figure out how to increase our happiness
without increasing our spending. Too many times, people make
happiness conditional based on their next big purchase. But
this rarely produces lasting satisfaction.
A variety of research studies have found that happiness has
more to do with having a plan for your income, than the level
of that income, be it from a limited hourly wage or a six figure
salary.
“In America, we are always being upsold,” Abey said.
“We’re asked if we want fries with that, or if we
want to super-size. From the happy meal to the luxury car, we
are always being upsold by people interested in making money
for themselves, with no interest in our happiness.
We need a strategy to fight back, to help us reframe decisions
linked to our happiness. So what researchers from UCLA did was
they asked people to choose between a luxury car with the basic
features, or the same car with all the bells and whistles, for
only 10 percent more cost. Most people, when they made the choice
from the narrow perspective of simply comparing the two models,
chose the upgrade. A separate group of people were then given
the same choice, but these people were also told that buying
the basic version was like getting almost the same car as the
luxury version, but the difference in cost would be enough to
pay for a couple of years worth of gas. Simply framing the decision
a bit more broadly caused most people to choose the basic car.
Same choice, same demographic, but the emphasis was on spending
less, not more.”
A lesson from this is that instead of measuring the cost of
everything in terms of money, its more useful to think of what
economists call the opportunity cost which measures cost in
terms of the next best thing we have forgone. In this spirit,
Abey described the concept of happiness opportunity cost, where
the measurement is happiness forgone. Closely linked to that
is the idea of happiness arbitrage, which refers to the potential
to increase happiness without spending more.
Abey conducted some research with AXA to show a simple way of
getting people to apply this idea.
“We asked a focus group of people what they could do with
$10 to $20 to make themselves happy,” he said. “Instead
of trying to buy a small luxury item or trinket, they mostly
responded that they’d use the money to have a cup of coffee
with a friend. The focus was spending time with a friend, and
not what they bought with the money. Again, they asked the group
what would they do with $100, and most of them responded by
saying they’d spend it on an evening out with friends.
The centerpiece was the fellowship of their company, not the
meal they bought or the show they’d see with them.”
“The most telling thing I encounter is a test I give people
in my seminars,” he said. “Shortly after the last
episode of wildfires in California, I began asking people what
they would run back into their house to save if they could only
get one thing before it went up in flames. Do you think they
grabbed the $3,000 flat screen TV or the $1,000 leather jacket?
No – most people respond by saying they’d rescue
photos. Family photos tucked away in a $5 photo album possessed
more value than any expensive material good in the house, and
that illustration hits home with people more than anything”
“At the end of the day, we need to let the realization
sink in that it is not only possible, but desirable, for us
to work on increasing our happiness without necessarily increasing
our spending. And by having in the back of your mind the things
that make you most happy it makes it a lot easier to say no
to people trying to upsell you.”
About Arun Abey
Arun
Abey has had a diverse career as an academic, an entrepreneur
and is now a top executive of one of the world’s largest
firms. He is involved in a number of philanthropic activities
and is the author of various international best sellers. A noted
strategic thinker and writer, he is Executive Chairman of IPAC
and Head of Strategy for AXA in the Asia Pacific, a part of
the global AXA group that manages over $1.5 trillion of clients’
money and is ranked as the 15th largest company in the world
by Fortune Magazine.
Source:
News and Experts
