Aunt Mabel likes to play Bingo every Friday night. One night she wins $25 and spends it on coloring her hair blue even though she has been saving for a new rocking chair. She said because she won the $25 instead of receiving it in her social security check it was "fun money." This is an example of .

mental accounting

Explanation:

Mental accounting is a process of psychologically evaluating and categorizing money according to the subjective standards, not dependent on the economical value of the money itself.

It can mean categorizing money in accordance with expenses or incomes. Here we see Aunt Mabel is categorizing the money from social security as the money meant for serious things, like the new rocking chair she needs, which is psychologically different from the "fun money" she got on Bingo.

The value of money stays $25, no matter what the source of income is, but subjectively Aunt Mabel is categorizing it as different money with a different purpose.

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