This was the assignment given to participants in a study conducted by the Harvard Business School, while others were also given money except they were told to spend it on themselves. What did they find? That “people who spent money on other people got happier,” while for “people who spent money on themselves, nothing happened.”

Michael Norton presents the findings in this eleven minute Ted Talk. Interestingly, from buying someone else a cup of coffee to giving the money to a homeless person, they found that the exercise had the same effect – it didn’t matter how the person spent the money, it only mattered that they spent it on someone else in order for it to have a positive effect on their happiness.

In his post about the study, behavioral economist Dan Ariely, explains that this study is part of a new hypothesis in the psychology of spending money which suggests that the relationship between peoples’ happiness and money may actually not be that having more of it makes people happier, but rather that their spending habits in their daily life (in this case spending regularly on others) is what can make people happier.

These are two powerful insights about gift giving that are seemingly counterintuitive. First, although we often worry about making the receiver happy, it turns out there can be big dividends for the giver. And second, that it’s the giving that counts more than the gift itself (Tweet this!). As cheesy as the age-old adage goes that it’s the thought that counts, maybe there’s more truth to it than we realize. Just the act of giving gifts can make people happier, and seemingly the effects are multiplied in a group that regularly gives to one another like an extended family.

What has been your experience? Has gift giving in your family made you feel happier and more connected?

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