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money
You spend money differently depending on where it comes from.
Mental accounting explains why you treat a $100 windfall differently than $100 from your salary.
You create internal budgets for different types of money. You are more likely to spend 'easy' money like tax refunds or gifts on luxuries. You treat money as fungible in theory, but in practice, you label it based on its origin.
Your brain tracks the source, not just the amount.
Where this comes from
- Study
- Thaler, 1985
- What the check found
- Thaler's 1985 paper, 'Mental Accounting and Consumer Choice,' is the recognized foundational text for this concept, which describes the systematic violation of the fungibility principle.
- Confidence
- Solid, with limits
Related
One of these every day, and every one names the study it came from. When a finding is contested, it says so.