Mental Accounting: How Consumers Divide Their Expenses

This mind map explores the intricate concept of mental accounting, a theory that examines how consumers mentally categorize and manage their expenses. Unlike traditional economic accounting, mental accounting delves into the psychological mechanisms influencing budget control and decision-making. It categorizes expenses into distinct accounts such as fixed expenses, hedonic expenditures, and emergency reserves. The map also highlights the impact of mental accounting on consumer behavior, including budget allocation, perceived value, and decision bias. Furthermore, it offers strategies for optimizing mental account management, emphasizing the importance of rational decision-making and fostering a healthy consumption mindset.