Last Updated on Apr 7, 2020 by James W
Have you ever thought of a better money management? Would you like to know that sooner or later this will be all possible? Well, believe it or not, this is something that can be learnt. Still, if followed, a single strategy might not lead to the expected outcomes, since others might interfere. Nowadays, sharing the best ideas seems to be the ideal way in which to create something that is all worth it! These being said, in case you are looking forward to knowing more concerning the subject, make sure to stick with us and keep an eye onto the following lines in order to see whether or not mental accounting is something that is good or bad for you!
What is Mental Accounting?
The best way to explain it is by using jars – for instance, think of it just like receiving your salary and start splitting your money into those jars – one of them would be for the rent, another for food, another for saving up and another for bills. Of course, you can have more and more jars, the more you actually want. In addition, bear in mind that once you see your money physically, you are actually more aware of them than before.
How can it be Good?
Well, this thing is literally already known. For instance, mental accounting can definitely be of great help when it comes to managing your financial resources and avoiding debt (yes, it really is). Just think of the fact that you will never run out of money once you have everything planned, due to the fact that you know for sure everything is being paid of time. On the other hand, another advantage is that it helps you be in control of your money, whereas the lack of mental accounting might lead you to nothing good, but… most probably debt, in case you are not aware of your money.
How can it be Bad?
Once you start to do mental accounting, you are basically closer to limiting yourself to a single strategy – which, in some cases, might help you avoid a lot of opportunities. This is not necessarily the very best thing in the world, since money can be used in so many other ways in which you can win a lot. Either way, it seems to be your own and personal choice in regards to how and when to use the mental accounting.
