tips

Money is money, whether it’s cash in our hands, plastic cards at checkout counters or encrypted bits of data coursing between computers on the internet.

But our brains don’t view all money as equal, thanks to what behavioral economists call “cognitive biases”:

—We spend cash more carefully than plastic.

—We regard tax refunds as a windfall rather than a return of what we earned.

—We’d rather have money now than more money later.

Sometimes our illusions about money can be harnessed for good. The “Save More Tomorrow” program, created by economists Richard H. Thaler and Shlomo Benartzi, has people commit to increasing their retirement contributions starting one year in the future. In the economists’ initial study , workers who agreed to save future dollars nearly quadrupled their savings rate in four years.

In my latest for the Associated Press, why our money illusions usually work against us.