The secret of happiness: Family, friends and your environment

We've suffered horrendous job cuts and plummeting investment values, and watched the high streets grow increasingly pockmarked by empty shopfronts, even as we face public sector job losses and the possibility of a double-dip recession. We might be forgiven for allowing ourselves a moment of misery. And yet, a growing school of thought believes that we have actually gained something from the last few years of economic gloom; that we are starting to value the things that matter: our friends, homes and the world we live in. Even more remarkably, they suggest that these things are making us happier than the conspicuous consumption and hedonism of the boom years.

While, arguably, everyone could be forgiven for battening down the hatches and looking after number one, it seems that across the UK people are becoming less materialistic and more outward-facing: volunteering, joining clubs and caring for the environment in record numbers.

From more Brits spending their weekends involved in wholesome outdoor pursuits instead of scouring the high street for the latest must-have item, to the growth in household savings – which rose to 6.9 per cent of disposable income in the first quarter of 2010, up from less than zero in the first quarter of 2008 – experts believe there is evidence that people have realised that happiness may not lie in the relentless pursuit of more, and better, "stuff".

The latest figures from the British Retail Consortium show that retailers selling big-ticket items such as flat-screen TVs, carpets and kitchens are reporting negative like-for-like sales when compared with last year, while the number of people who walk for leisure increased by almost a million, rising 10 per cent between 2006 and 2008, and the number of recreational cyclists rose by 6.4 per cent between 2008 and 2009.

Although we may be on the cusp of a "new" happiness movement, the quest for it is as old as mankind, and has preoccupied some of the finest minds in history, all of whom have had differing theories. While a definitive answer to the question of what makes us happy might have eluded everyone from Socrates to Thomas Aquinas, a US academic now believes she has the answer.

In a new paper, If Money Doesn't Make You Happy Then You Probably Aren't Spending it Right, Elizabeth Dunn argues that spending money wisely is a sure-fire route to happiness. Dunn lays out eight ways to use money to make you happy: buy

experiences instead of things; lots of small treats instead of a few big ones; give money to others; pay now and consume later; think about the negatives of what you want to buy; don't use price comparison sites as they distract from other attributes a product has; follow other people when choosing what to buy, as they are a better predictor of how happy a purchase will make us than our own judgement.

"The situation hopefully encourages people to focus on the key things in life which, the research says – and, to a large extent, they intuitively know – really make them happy: relationships with family, friends, contact with the natural environment, and so on," said George MacKerron, a researcher at the London School of Economics who specialises in well-being. "On the other hand, I think there's a slight risk that those who were sceptical in the first place start decrying well-being/happiness research as somehow unserious or childish in the face of the 'important business' of growing GDP and creating jobs."

The evidence, however, suggests the subject is being taken ever more seriously. Liverpool declared 2010 its year of "health and well-being". Next January, meanwhile, the "Movement for Happiness", which aims to increase happiness and decrease misery, will be launched by no lesser mortals than Anthony Seldon, master of Wellington School, Lord Layard, dubbed the Government's "Happiness Tsar", and Geoff Mulgan, a former Downing Street policy head.

The idea that happiness lies not in flashing the cash, but in modest living and giving something back to society has also been identified as an emerging trend by The Boston Consulting Group, management consultants, in a recent report entitled New World Order. An increased desire to connect with a community is also part of the new movement, with growing numbers keen to join clubs and churches, or get involved in volunteer work. These activities are thought to offer a stable network which in turn promotes happiness. The charity Community Service Volunteers has reported a rise in all types of volunteering: the number of people mentoring young people in care doubled from 2007 to 2009, while the number of people taking part in environmental volunteering through the charity rose from 17,195 in 2008 to 20,333 in 2009.

However, while people may be keen to give their time to charity they are less keen to part with their cash. Charitable giving declined in the recession, from £10.6bn in 2007-08 to £9.9bn in 2008-09. However, a recent report from Merrill Lynch Capgemini's World Wealth Report showed that 41 per cent of Europeans planned to increase their charitable giving in 2010.

Increased interest in caring for the environment and spending more time outside are also an important part of the "new happiness".

"As a society, we hugely underplay the importance of natural environments on happiness. Not just the awe at a beautiful view, but the de-stressing effects," said Jody Aked, a researcher at the New Economics Foundation's Centre for Well-being.

In an attempt to better understand how people's feelings are affected by their immediate environment researchers from the London School of Economics will tomorrow launch a "mappiness" project, which aims to track British happiness. Using a free iPhone app, researchers will ask users how they feel at regular intervals, using GPS to pinpoint their location.

Although experts in the new science seem unified on the subject of what can help boost happiness – spending more time with friends and family, in pleasant natural environments, for example – some believe this change has yet to hit Britain.

"I don't think this has happened here yet," said Alexandra Watson, a happiness coach. "The culture of money and fame is still peaking here. There is evidence of people wanting it to change, but we are usually behind the US by a year or so in terms of trends."

Others argue that Brits are just as preoccupied with spending money in 2010 as we were before the recession, but that changing fashions mean that the appeal of status symbols such as sports cars and yachts is waning. Global yacht sales fell 45 per cent in 2009, while Bentley sales were down 57.2 per year on year for the first six months of 2010.

Additional reporting by Pavan Amara and James Burton

Back to nature: 'Money can't buy that feeling of reward'

Yasco Takahashi, 42, Scotland

"My life was full of material stuff. I lived and worked in financial services. I had lots of friends, but no deep connection to any. I could spend £2,000 on clothes in one go. I went on holiday to Hawaii and Fiji. It all sounds great but I just felt lonely. I bought things to stop depression creeping in, and focused on the new bag or new dress. But that meant I couldn't focus on who I really was. I stuffed my feelings with rich food or by getting drunk. But, at 35, I started experiencing severe migraines; they wouldn't go away no matter what I did. I felt I was half-dead. I realised I was living for what my friends thought of my outfit, or how much pension money I had. It made no sense, and I came to the Findhorn community in Scotland to escape. I started growing my own vegetables, appreciating nature and myself. Before I used money to change myself – how I looked and felt – and to control my feelings. Now I control my feelings without money, and that makes you mature and deepen. Money can't buy that feeling of reward. I live on £200 a month, but I feel better. I wake when I naturally feel like it, and I do graphic design, which I enjoy. I'm no longer doing something I don't like. I express myself and can laugh, instead of burying my feelings. I sleep better than I did when I spent a fortune on clothes to make me happy."

What makes celebrities happy?

Michael Palin, comedian

"All sorts of things make me happy: getting up in the morning and not falling over for one. Sitting in a café with a cup of coffee, good company with friends. It sounds terribly pretentious but it is true."

Jasmine Harman, TV presenter

"The happiest moment in my day is walking my dog. We both enjoy it, and I'll use any excuse to go. I get out, I get active, and the endorphins get going which is great because that's the happy hormone."

Sarah Beeny, TV presenter

"The thing that makes me happy is spending time with my husband, four children, and entire extended family and good friends. Memories will stay with you for ever."

Antony Worrall-Thompson, chef

"For me, money is not relevant. It's about good friends, good family and health. It's being grateful and content with your lot. Happiness is more a frame of mind, I think."

Stuart Semple, artist

"My son makes me truly happy. He's 13 months, and the happiness he brings me is different from anything else I've ever known. Happiness from real things and from flash things are worlds apart."

Katharine Hamnett, designer

"Happiness to me is family, good close friends, being in control of my life, laughter and love. All those are real, and give me a lasting happiness that handbags don't – and can't – give."

Glenda Jackson, politician

"You are kidding me, aren't you? Happiness? I can't think of anything that makes me happy. I can't think of anyone or anything. Nothing. Nothing comes to my mind."

Bill Oddie, comedian

"To be happy you need enough money. Happiness to me would be being able to help all my kids financially. It's a very strange person... no, actually... it's a hermit who can live that abstemiously that they don't need money."

John Humphrys, broadcaster

"You're a bit odd if your family doesn't make you happy, aren't you? So yes, my family make me happy, but that's about it, and that's because it's a requirement."