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Ep.203 Mental Accounting: Why We Treat the Same Dollar Differently
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Mental Accounting: The Money Trap That Feels Smart (But Isn’t)
Ever stash cash for a vacation while drowning in credit card debt?
That’s Mental Accounting—your brain’s sneaky way of making irrational money choices feel logical.
🧠 Here's how it works:
We assign different value to the same dollar based on:
- Where it came from (bonus vs. paycheck)
- What it’s for (fun vs. bills)
- How it’s labeled (savings vs. debt)
But here’s the truth:
💵 A dollar is a dollar.
And if you're earning 1% in savings while paying 19% on a credit card,
you're losing money—emotionally, not financially.
✅ Fix it with this rule:
Every dollar should be optimized, not sentimental.
Money doesn’t care where it came from.
Use it where it works hardest.
That’s not just smart finance—it’s financial freedom in the making.
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