You’re likely familiar with accounting, so perhaps you can gather that mental accounting is essentially about how we account for things in our mind. But, you may not realize that it isn’t just mental math. This is about how we tend to create separate accounts for things in our minds that feel concrete, but often aren’t. When I give examples in this episode today, which originally aired in the summer of 2019, you are going to find yourself saying, “Well, obviously that is how it works!” And then when you realize it doesn’t have to be that way…it’s kind of mind-blowing, but in a good way.
Mental accounting is great in a lot of ways. It helps us to save money and prioritize things that we might have a harder time with if everything was all lumped together. But it doesn’t mean it is the ONLY way or even the right way. It might just be the best way our brains are doing it right now, and it is always a good thing when you can know the rules your brain is using to make its decisions as well as that of your employees, peers, customers, and more.
So, why are we talking about mental accounting today? It’s because this Friday I am joined by Dr. Merle van den Akker, an expert on psychology and personal finances who runs the Money on the Mind blog. When she is here on Friday we discuss how the stress of money (fear of losing a job, concern about inflation, and the like) can impact employees. And, we of course take it a step further to unpack what businesses should know about these topics to better support their employees and why, even if a company thinks this doesn’t have anything to do with them…it absolutely does. This kind of stress has a lot of economic impact on an organization, and it doesn’t have to be difficult to support employees and achieve that win-win. We specifically talk about mental accounting in the episode, making it the perfect time to refresh it and get you set up for success for Friday!
