What does a mental account mean？

A mental account refers to a psychological concept where individuals categorize and organize their financial resources or assets into separate mental compartments based on their perceived purpose, source, or use. These mental accounts can influence people's financial decisions and behaviors, as they may prioritize certain goals or expenses based on the mental account they are assigned to. For example, a person may have a mental account for their savings, another for their retirement fund, and another for their emergency fund, each with different goals and priorities.