Julia Wise is a social worker and her husband Jeff Kaufman is a software engineer. In 2013, their combined income was just under $ 245. And yet, with the exception of taxes and savings, they spent only $ 000 on housing, or 15% of their income. Tells about it Quartz.
What happened to the rest of their income (slightly less than 100 000 dollars)? They gave them to charity.
That's 40% of their pre-tax income, and it's not an isolated case: every year since 2008, they've donated a comparable percentage.
The story of Jeff and Julia is one of the main stories in Larissa McFarkhar's new book Drowning Strangers, in which she presents cases of so-called extreme dignity.
Having learned about such actions, you can assume that these people should be quite unhappy. You might even think that their stories sound like a warning example of extreme self-denial.
In truth, this may not be far from the truth. Over the past few years, I have been fortunate to consider Jeff and Julia as friends and I don't think I've ever met a more stable, happy, and completely normal couple.
They prove that you can have a perfectly ordinary, pleasant and well-ordered life, and altruism is a major part of your personality.
It may seem counter-intuitive in our consumer culture, but high standards like theirs can and do enrich your life by making you happier than if you spent the same money on yourself. Let's look at the evidence.
It is true that money cannot buy happiness. But saying that has become a cliché in recent years that people have forgotten exactly what it actually means in the first place. Let's now forget the question of donations and just consider the impact of lower income.
Psychologists conducted a study of the relationship between money and happiness. They have consistently found that for those of us who live in rich countries, additional income after a certain point simply does not increase well-being.
On average, people in the US with income in 32 000 dollars rate their satisfaction with life as 7 from 10. Income in the amount of 64 000 US dollars only raises the rating to 7,5. This is a fairly small difference for a relatively large amount of money.
However, we constantly overestimate the impact of income on our level of happiness. One study found that a representative sample of Americans greatly underestimated the happiness of people earning lower household incomes ($55 or less).
In fact, this bias is not limited to income: we generally overestimate the extent to which good events improve our happiness and bad events lower it.
There are two reasons for this. First, thinking about the changes in our situation (for example, loss of income), we underestimate what will remain constant during this time (for example, the presence of friends and relatives), which will significantly soften the blow.
Second, we too often fail to realize how well we adapt to new situations, including changing income levels and living standards. Although lottery winners experience a burst of happiness immediately after winning, a year later their level of life satisfaction is comparable to what it was before.
Once you appreciate this, it becomes clear that accepting even a large reward can have a small effect on your happiness in the long run. But, as we shall see, giving away part of the income is much better than losing income.
Not only does this not involve the loss of status that often accompanies declining income: donating for good reasons is what makes you feel better.
Distributing donations makes you feel good
One experiment showed that when money was donated from participants to a local food bank, the reward centers in the donators' brains were activated. This worked even where donations were required.
Perhaps more surprising is that donations can make you feel better than if you were spending money on yourself. In another experiment, participants were presented with an envelope containing a small amount of money that they had to spend during 24 hours.
Half of the participants had to spend money on themselves (for example, paying a bill or buying a treat), while the other half had to spend it on others (for example, buying a gift or donating money to charity). The results were clear: subjects in the second group reported greater happiness than those in the first.
Extensive international research has found a positive relationship between the provision of charity and subjective well-being, even the control of household income. The surprising conclusion was that, on average, the gift of charity will honor the same connection with happiness as doubling household incomes.
About donations seriously
All this suggests that even a small donation to others can be an effective way to improve your own quality of life.
You don't have to give 40% like Julia and Jeff, but I encourage everyone to donate a significant portion of their income. People who join Let's Do What We Can, a community I helped find, have pledged to give at least 10% to effective charities.
Today the organization has over 1200 members and is growing. And if you're still worried about the short-term pain of spending cuts, try this: Make a commitment that every time your income increases in the future, you'll donate 50% of the difference. Thus, you will never get used to the increase in income and never feel the loss of it.
By giving your income to the most effective charities in the world, you can make an incredible contribution to the lives of the poor and disadvantaged. If it is possible to do this and at the same time make ourselves happier, then, of course, we should do so.