2min chapter

Hidden Brain cover image

Money 2.0: Why We Bust Our Budgets

Hidden Brain

CHAPTER

The Implications of Mental Accounting

Abbie susman is a psychologist who studies why people and organizations fail to spend within their means. One driver of exploding budgets has to do with what economists call narrow bracketing. Our choi es about how and where we spend money are shaped by where we got the money, the size of the expense and the context. We may rationally know that a dollar is a dollar but emotionally it feels different.

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