Worried About Money? Give Some Away
Give away a dollar, get back peace of mind.
Posted Aug 13, 2011
In a study published in Science in 2008, participants were given an envelope containing either $5 or $20 in the morning and asked to spend the money by 5 p.m. Those randomly assigned to a “personal spending” group were told to use the money on a personal expense or gift for themselves, while those assigned to a “prosocial spending” group were told to use the money on a charitable donation or gift for someone else. At day’s end, the participants were asked to rate their happiness. Those who had spent as little as $5 on another person or cause reported being happier than those who had spent it on themselves.
Sharing the (Modest) Wealth
Clearly, you don’t have to engage in Bill Gates-level philanthropy to get a psychological boost from giving. As it turns out, those with the least money to spare may be most inclined, in general, toward sharing what they have.
An article published in the Journal of Personality and Social Psychology in 2010 looked at this phenomenon. In one study, researchers encouraged participants to see themselves as belonging to either a lower or higher socioeconomic class. Then they asked participants to rate how much of their money should be spent for various purposes. Participants who were led to think of themselves as being on a lower rung of the social ladder said that a greater percentage of one’s annual salary should go to charitable donations.
Feeling Like a Million Bucks
Why does giving money to a worthy cause or a friend in need lift your spirits? First, it may foster a sense of social connectedness. One theory posits that the more modest your means, the more you and your close family and friends may need to rely on one another to get by; hence, the greater focus on generosity.
Second, donating money gives you a sense of making a difference. That’s a welcome antidote to the feeling of helplessness that can come from watching wild stock market gyrations and wildly frustrating budget stalemates.
Third, sharing even a little money may reduce your body’s stress response. Elizabeth Dunn, PhD, the same University of British Columbia psychologist behind the $5 spending study, also led another recent study that looked at how monetary stinginess affects cortisol, a stress hormone. In the study, college students played an economic game, for which they were paid $10. Students had the option of donating some of this payment to another player. Those who kept more of the money for themselves reported feeling more shame. And greater shame, in turn, predicted higher levels of postgame cortisol.
So a case can be made that giving away a few bucks is good not only for your soul, but also for your mind and body. No matter the amount, reminding yourself that you still have the wherewithal to share could be just what you need right now.