Tax rebates, year-end bonuses, mail-in savings—they're all just money coming in, but the difference in labels can have a serious impact on what we do with it, according to a Harvard researcher quoted in today's New York Times. In a study, half of the participants were given $50 and told it was a "bonus," and the other half received a "rebate." The results:
When unexpectedly contacted one week later, participants who got a "rebate" reported spending less than half of what those who got a "bonus" reported spending ($9.55 versus $22.04, respectively).
Being someone who often has to trick himself into saving and spending less, I'm thinking of adding only a "Rebates" line to my monthly budget. Do you use money differently depending on how it comes in, or do you keep to a double-entry system? Share your methods and madness in the comments.