Mental accounting is the powerful, yet often invisible tendency people have to treat money differently depending on how it is labelled or where it comes from. A tax refund might feel like “bonus money” to spend freely, while a pay check is guarded for bills and necessities. Though irrational in strict economic terms, this quirk of the mind reveals how deeply emotions, stories, and context shape financial behaviour.
For society, mental accounting is not just a curiosity. It offers a bridge between human psychology and better policy design, helping governments and organisations nudge people toward saving, investing, or adopting healthier lifestyles. When harnessed thoughtfully, it can empower individuals to allocate resources toward long-term wellbeing, like creating a “health fund” for nutritious food, fitness, or stress relief, rather than letting short-term temptations drain their future. By reframing how we mentally “budget” our lives, mental accounting can become a tool not of limitation, but of liberation, guiding people to spend with purpose, cultivate balance, and build resilience. We recognise that human reframing will always be biased to some degree, and that it is only when both our money and our attitudes to it are submitted to God that our money management will be fully effective.