Financial Education - The mental value of money from an accounting perspective

At some point in our lives we have heard that mathematics is exact. And the truth is that, in theoretical terms, it is, but when it comes to resources such as money, it is very common that, for example, banknotes from different locations or countries do not have the same value for all people.

In other words, this is the mental accounting that everyone does automatically in their head and in which - according to Thaler's theory - aspects such as the origin of the money, the context, the personal situation or whether they have had to make some kind of effort to obtain it are taken into account.

Although we may not be aware of it, our brain can automatically choose how to manage money. And it does so taking into account criteria more related to emotions than to reason, which is why we do not always make the most appropriate financial decisions.

Another aspect that our brain takes into account to give one value or another to the resources we have is that in its mental accounting no losses are registered. For example, if we have a ticket for a concert, but it is necessary to stand in line for several hours in the rain, it is more likely that we will resist the inclement weather if we have invested money in the ticket.

If, on the other hand, it were a complimentary or gift ticket, the probability of not waiting and returning home would be greater, since our brain interprets in its accounts that we are not losing money. However, in both cases, the objective value of the ticket is the same.