The Importance of Mental Accounting

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Mental accounting is where we place different values on money, even though a dollar is a dollar. This can be helpful when you set up mental accounts that are attached to powerful motivating goals for you. It's something that we use all the time is financial planners and it's something that can be harnessed to our clients benefit.

Dr. Charles and Dr. Brad talk about the usefulness (and lack thereof) of behavioral finance as it relates to financial planning practice. They then dive into several of the biases and heuristics that they see as most relevant to a practitioner and how each can be applied in practice.