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Using the examples from the professor's lecture, explain the concept of mental accounting.
Mental Accounting
Although they may not realize it, people do not always manage their money in responsible way. In their minds, people tend to divide their money into different categories as if they were putting it into separate mental bank accounts. This tendency is known as mental accounting. People mentally store some money in one account to be saved, while they imagine other money being stored in another account from which money can be taken and freely spent. Mental accounting can lead people to spend more money than they should, which can make it difficult for them to save enough money to achieve their long-term financial goals.
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Post dates | Users | rates | Contents |
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2015-10-27 | lucaskotw | 80.00 | Check this speaking |
2015-10-07 | lucaskotw | 70.00 | Check this speaking |
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