Money can’t buy me love,” the Beatles once told us. But how about happiness? According to Elizabeth Dunn and Michael Norton, money can make you more satisfied with life; you just need to know how to spend it. In their book Happy Money, Dunn and Norton offer “five key principles” for happy spending.

Buy experiences. Don’t bother with material things. A new Porsche may make you happy for a while, but the joy soon palls. Spend your money on experiences instead – go on holiday, see a show or dine out with friends. Such experiences will make you happier than owning stuff, and give you something to talk about at parties.

Make it a treat. Because human beings quickly habituate to the status quo, even enjoyable experiences eventually become boring. So try to dole out your pleasures. Make your morning coffee a special treat rather than a daily routine. Instead of staring at the TV for hours, save your viewing for special shows. Break out of a rut by rewarding yourself and your partner with the occasional date night.

Buy time. Time is too precious to waste shopping: it should be used for activities that produce lasting effects on happiness. Ignore those who say, “Time is money.” You won’t enjoy visiting a museum, or gardening or playing with your kids if you spend the time dwelling on the money you would be earning if you were working instead.

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Pay now, consume later. Where possible, Dunn and Norton suggest exchanging “buy now, pay later” for “pay now, consume later”. Not only are you less likely to get into debt, the pleasure of anticipation provides an extended source of happiness. If you book and pay for your winter ski holiday in the autumn, you can dream about the slopes for months before you depart. When you finally get around to going, it will be so long since you paid it will seem as if the holiday were free.

Invest in others. If happiness is your goal, then the single best thing you can do with your money is to spend it on someone other than yourself. Investing in others allows you to connect with other people and to make an impact on the world – and it is good for your health as well.

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Dunn and Norton, who met at “academic summer camp”, are enthusiastic and engaging writers who are not averse to the occasional nerdy joke. However, their book is quite serious and they are careful to back up their recommendations with citations to the relevant academic literature. Although a few of their recommendations are counter-intuitive, most echo the ancient platitudes: life is short, time is precious; everything perishes, everything palls; a pleasure delayed is a pleasure doubled; and it is better to give than receive.

The key principles of happy spending are good rules for living, but they are rarely obeyed. Porsches remain in high demand. Consumers continue to buy them now and pay for them later. People still complain about having too little time for their families (although they seem to have plenty of time for television). Investing in others remains a minority pursuit. Why do people continue to behave in this apparently self-defeating way?

Dunn and Norton blame a lack of data. People “don’t fill out a happiness scale every day, and then look back at the results and see what made them happy and unhappy that day”. In other words, we are not aware of what makes us happy. If we knew what psychologists know, we could make ourselves much happier.

Maybe, but don’t bet on it. As Dunn and Norton themselves admit, “chasing happiness can be counterproductive”. This was certainly J. S. Mill’s belief: “Ask yourself whether you are happy, and you cease to be so.” Doling out your treats may make them more pleasurable, but if you arise in the morning determined to make yourself happier by changing your latte habits, you are doomed to disappointment. Pursuing happiness in this way is an exercise in futility and a guarantee of chronic unhappiness. Happiness (as someone wise once said) cannot be sought, it sneaks up on you – the effect of having something useful to do, someone to love and something to hope for. The Beatles were right all along: money can’t buy you love and it can’t buy happiness either.

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