Mental Accounts or why some people find it hard to save


Moderator Emeritus
Dec 27, 2005
I found this an interesting discussion of how people keep track of their mental purchases and spend their money. It answers my question of why certain family members, when getting a windfall went to Disneyland rather than pay their medical bills.

"Someone gives you money for your birthday and they don't say, 'pay your electric bill,' but money is money and completely fungible, and if you are behind on your electric bill, you should definitely spend your money on that," she added. "But there is a reluctance to do that."

Washington Post - free registration required
Some people may think that way, but I don't. When I get a windfall, it pays off bills and once they are paid off, it goes into my retirement nestegg. That's what happened to my cash award from work. That's what I did with Christmas and birthday checks. That's what I did with my tax refund.

I think it's the LBYM mindset that many of us here have in common.

I am clearly focused on my goals and retiring comfortably is a higher priority for me right now than going to Disneyworld.

It's interesting to read about other mindsets, though.
Interesting theory...but I think comparing to medical bills is a bit different...many people believe that medical treatment is a right even though they arent currently taxed for it except to pay for some poor and the elderly...
I'm not as described in the article but I know plenty that are including my parents. we lived pretty close to the poverty line but my parents went and played Bingo every week they had money left over to afford it. (neither of them ever went out drinking or to pubs,clubs, cinemas etc).

We only ever had 2 vacations away from home (I have 3 siblings) and both of those came with big wins on the Bingo. Another Bingo win bought an electric twin tub washer and spinner instead of the old mangle, other wins bought a TV, a new bed, a steam iron and ironing board etc.
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