Why does spending on others make us happier?

In the age of solitude and the little treat economy – where we reward ourselves with small indulgences like an artisanal pastry, we are prioritising ourselves more than ever. 

Valentine’s Day and long winter fatigue nudge us further towards “treat yourself” moments. Fancy dinners, scented candles, quirky merch – small indulgences framed as self-care. It works. Nearly 60% of Gen Z say this “little treat” culture leads them to overspend.

The global wellness economy reached $6.8 trillion in 2024 and is projected to grow to around $9.8 trillion by 2029 (McKinsey). More than half of global consumers say they are willing to spend $100+ per month on nutrition, self-care, and mental or physical health.

And yet, research points to the paradox – spending that delivers the strongest emotional return is not self-focused, but directed towards others.

Why spending on others feels better?

Research from Harvard Business School shows that prosocial spending – spending money on other people, increases happiness more than spending on oneself. The study found that any act of generosity improves mood because it creates a sense of impact, regardless of how much is spent. Small acts of giving, say treating a friend to a coffee, can feel just as rewarding as larger gifts. What matters is the personal aspect. Sharing a  meal creates a more immediate and social payoff than tapping a “Donate” button on a screen.

So why aren’t we more generous more often?

People systematically underestimate how positively others will respond to gifts, gratitude, or support. Behavioral scientists call this undersociality: people holding back from acts of kindness because they expect awkwardness or negative reactions. In reality, recipients respond far more positively and with more gratitude than expected. In other words, people want to be more generous, but hesitate.

This aligns closely with patterns we consistently see in our Human Context Circle. Prosocial spending sits at the intersection of key human drivers: the need for social ties, the desire for purposeful action, and moments of transcendence beyond the self.

For brands, the opportunity is to help people act on this impulse.

Make giving participatory:

Prosocial spending works best when people are directly involved, choosing what to give and who benefits rather than brands donating on their behalf.

Think gift-giving features, shared experiences, or buy-one-give-one formats. Example: Coca-cola The Friendship Machine.

Let customers choose to give

“Sharing is caring” and the positive feelings it brings only works when sharing feels voluntary, and not forced.

Think opt-ins instead of defaults, choice of cause over one-size-fits-all campaigns, and personalisation rather than mandatory giving.

Show what changed

When people can see who benefited or what changed, they are far more likely to give again.

Move away from vague promises like “making the world a better place” and focus on clear, human results such as “a meal was shared,” “a project was funded,” or “this person was supported.” A case in ponint: TOMS shoes  – for every pair purchased, a pair was donated to children in specific communities in countries such as Argentina, Ethiopia, and Haiti. 

The takeaway

Shift the narrative away from indulgence and towards connection, and remind customers that treating others can also be a way to treat yourself.