Our mental accounting makes no sense

I’m paraphrasing this from Mind Over Money, a book about the psychology of money.

Let’s say you’re on vacation and decide you’d like to take out some bikes for a little tour around town.

Renting bikes directly from the the hotel will cost you $40 for the day. 

But 10 minutes down the road, there’s a bike shop that’s only $20 for the day.  So you walk 10 minutes to

save $20.

After all 20 bucks can buy you lunch along the way.  

Now let’s say you’re buying a new car. If you’re willing to spend 10 minutes completing a customer

satisfaction survey, they’ll knock $20 off the price of your car.   

Most of us wouldn’t do that because if you’re dropping $30,000 saving $20 feels inconsequential so why

even bother?

But clearly if $20 is worth 10 minutes when renting a bike, then it should be worth 10 minutes when

buying a car.  

But our monkey minds can’t help looking at things from a relative basis. 

And that’s why I pennies up off the ground. 

It’s part of my attempt to train my brain to value money regardless if it’s $20 renting a bike or buying a

car or free money laying on the sidewalk.