Mental accounting as of · 237
In a household notebook, Mental accounting is judged from . The line is “Behaviour is a rate” and the figure in the sum is 1. A blinking gain on a screen is not the reason. Money without a date is storytelling. Compounding and discounting both need a clock.
Money in labelled jars feels different — useful for goals, dangerous when it hides true opportunity cost. Mental accounting is treating identical money differently by label — powerful for budgeting goals, costly when labels block net-worth logic. Mental accounting sits in the behavior family of this atlas: mechanisms first, products second, hype never.
Use the calculator for scenarios, then return to the section pages when you want the vocabulary behind the curve. What is mental accounting in one sentence? No. Tool-Lifes pages are educational atlases. Decisions need your goals, constraints and, when appropriate, a licensed adviser.
Do I need a high return for compounding to matter? Higher net rates help, but time and contributions often dominate — especially early. Costs and behaviour can erase a “good” rate. Treat outputs as scenario sketches. Vary contribution, rate, fees and inflation to see which lever moves your goal date.
For Mental accounting in , the figure that stays is 1, named “Behaviour is a rate.” Sparkle is not a figure.1
Figures to keep
- Year of the rule
- 1
- Figure in the sum
- 1
- Item
- Mental accounting
- Reason kept
- Behaviour is a rate