Mental Accounting
Psychological Accounting
The tendency to treat money differently depending on where it came from or what it's earmarked for, even though all dollars are objectively equal.
EverydayConcepts.io
Origin
Coined by economist Richard Thaler in a 1985 paper. Thaler showed that people create mental “buckets” for money — treating a tax refund differently from salary, or being more willing to spend a windfall. This violates the economic principle of fungibility (a dollar is a dollar), but reflects how humans actually manage finances.
Updated February 22, 2026