They say that money can't buy you love and this is certainly true but money spent on others can certainly bring you a whole heap of happiness. So why does treating a friend or family member bring out the 'happy' hormone?

The good news is that there is no price limit on the amount of money that we can spend on people, it is simply the thought and action of purchasing and giving which can lead to inner satisfaction. Spending just £2.50 on someone taps into the secret of happiness. By intentionally setting out to buy somebody something nice without any ulterior motive other than to make someone happy, is the route to lasting contentment.

This shows that the way we spend our money is just as important as how we earn it. Are you overjoyed when you receive that long awaited pay rise? Very often, it just dwindles away on luxuries that we do not really need such as plasma TV's and designer clothing which only provides a temporary surge of pleasure. The world has become polluted with the notion of "living up to the Jones's" and we are constantly trying to improve our social status with the latest gizmos and gadgets. But when a percentage of that money has been spent prosocially (i.e. on friends, family or charities), the level of happiness increases and the benefits of additional income has been experienced not just by you but by others too.

Whilst it is acceptable that people gain more self-confidence when they earn enough to move from a position of poverty to middle class, an increasing pay packet soon loses its level of inner contentment. In fact, the more our earnings increase, the less happy we feel. This is evident when you imagine someone leaping from £100,000 per annum to £110,000. These figures do very little to fill the heart with joy as the mind has become accustomed to seeing such sums. If you relate that extra surge of income to a family or friend you will see that your healthy bank balance has not made one ounce of difference to Jane, your best friend who is a single parent or your brother who is a full-time carer to his beloved wife.

A recent study in the USA provided some interesting revelations with regard to the satisfaction we receive from our monthly earnings Over 600 people were asked to reveal how much they earned on a monthly basis, they were also asked to estimate how much money was deducted from their earnings for bills and to rate their level of happiness. The results showed that 90% of outgoings were connected to paying bills, living expenses and treats which provided peace of mind but did not bring inner contentment.

On the other hand, people who chose to willingly donate a sum of their earnings to charity or to buy gifts for family or friends expressed a higher level of personal happiness and fulfilment. These findings show that people who are more openly giving are far likelier to have a wider circle of friends, a loving and close family and people all over the world who they will probably never meet who are eternally grateful for their unselfish charitable donations. It also shows that this sort of spending increases a social network as the simple act of buying someone from yoga class a cup of coffee can help to build a new friendship and thus expand happiness levels. Simply put, doing a kind deed for others can turn a distant friendship into a deep lasting one.

Further studies back up these findings. In a controlled experiment 46 people were each given a sum of money to spend ranging between £2.50 and £10, they were given an afternoon to spend it. These people were then split into two sets with 23 being asked to spend the money on themselves and the other 23 being told to spend the money on someone who they thought would most benefit. At the end of the day, both groups were asked to explain their level of happiness. Not surprisingly, it was the group who had spent on others who felt the most inner satisfaction even though they were acting on instructions and not buying out of their own freewill.

Higher incomes put people on a hedonistic treadmill of becoming even more distant and self-sufficient as they no longer see the need to rely on others and in turn, tend to think less about other people's needs. When given a hypothetical thought about money, people instantly drifted off into fantasies of how they would spend it to improve their own lives, rather than looking at how they could use it to help others. These are the people who prove to be the most unfulfilled and discontented with life. These are the people who have few friends and spend very little time with family.

Social norms only kick in when consciences are pricked in relation to matters connected to honesty, happiness and generosity. A group of students were asked to complete a test and then mark it themselves. Before the marking began, they were asked to either list the Ten Commandments or the titles of the last ten books they had read. Those who had recited the Ten Commandments marked themselves more honestly than those who had listed their books. This shows that when pricked even remotely about social norms, people are more likely to act with thought and consideration.

With this thought in mind, it is recommended that higher management should educate staff on the benefits of spending on others. This could be further aided by providing examples as to how employees can become more inventive, thoughtful and creative with how they spend their earnings. For example, many companies donate a lump sum to a chosen charity each year. A good idea would be to suggest that workers make their own personal contributions to charities which have the most personal impact on them. This helps to create a pro-social working environment which in turn, produces an office of happy, contented employees.

These findings reveal that inner happiness has very little to do with job title and income status which only provides a limited amount of happiness. Greater joy can be found when money is used to purchase a piece of pleasure for someone else. Try it for yourself and watch your happiness level rise. Take a look in your purse or wallet right now and see if you do not feel better by taking some time out to think about someone who has slipped your mind. Spend a bit of time and money on their happiness and you will be glad you did!