It will help you to think of solutions and better yet understand what other people's actions are caused by. Visualize Negative Thoughts Turning into Positive - Here's an activity that works wonders for negative thoughts. When you have a negative though, visualize it in your head and then slowly transition it into a positive image instead. Just got a parking ticket? Visualize it paid off and torn up. You still have to pay that ticket, but now you're thinking of the time after, not the act of paying. Create an Ideal Image and Work Toward It - This is a common NLP (neuro-linguistic programming) exercise. In it, you visualize your ideal self - the perfect version of you that you want to present to people. Then, you visualize yourself as you currently see yourself and slowly work toward shifting your mental image of one or two things at a time to the ideal self. For example, if you're worried about your weight, you would visualize your ideal weight and your current weight and then slowly change how you think of yourself to be closer and closer to that ideal image. What if you bought a ticket for $75 to see your favorite sports team play, and when you go to the ballpark, you realize that you lost the ticket. Are you going to spend another $75 to see the game? Now suppose that you go to the ballpark expecting to buy a $75 ticket at the window. When you check your wallet, you realize that you have more than enough money to buy the ticket, but that you just lost $75. Would you buy the ticket? When people are given decisions like these, most answer no to the first question and yes to the second. One study found, for instance, that only 46 percent of us would buy the ticket in the first case, while 88 percent would buy it in the second.11 Why is that? In the first case, we put both cash outlays of $75 in the same "mental account" because both amounts relate to buying the ticket. We start to think that the game is costing us $150, which is more than we're willing to spend. In the second case, the two amounts are put in different mental accounts because we don't associate the lost money with the ticket price, and so we buy the ticket.

But we're in the same position at the end of the day if we buy the ticket--we get to see the game and we're out to the tune of $150. Yet our decisions differ. With mental accounting, we pigeonhole our money into different categories or accounts, and then treat that money differently depending upon the account in which it's kept. In fact, we can waste our money because of mental accounts.13 Traditional economics says that all money should be fungible--it shouldn't matter if it comes from our salary, from a gift, or from gambling winnings. The money in each case should have the same value to us, so we should spend it the same. But that's not how we act. We often spend money which we receive as a gift or from gambling much more freely than money we had to work for. This even applies to our tax refunds. We frequently think of our tax refund as a windfall, and so we're more likely to spend it frivolously. However, a refund is really a deferred payment of our salary, a type of forced savings. If we save money from our paycheck, we typically give considerable thought to how we're going to spend it, but we don't do that with a tax refund. Why? We put the refund into a separate mental account. I often travel to Australia to present and discuss research projects at various universities. Any stipend that I receive is quickly, and extravagantly, spent. I buy more expensive meals and spend much more on wine and beer. I'll often buy a $75 bottle of wine to have with dinner down under, while back in the United States I spend only around $25. Why? I don't consider my stipend to be part of my normal salary, and so it goes in a different mental account. While I have a great time, I'm making very different financial decisions than I would if I were at home--all because of my mental accounts.

The size of our mental accounts can also affect our financial decisions. How would you act in the following two situations? You're at a store to buy some new computer software that costs $100. The salesperson tells you that the same software is on sale at another store that's a ten-minute drive away for $75. Would you go to the other store? You're at a store to buy a new computer that costs $1,900. The salesperson tells you that the same computer sells for $1,875 at another store that's a ten-minute drive away. Would you go to the other store? Most of us would go to the other store in the first case, but not the second. The percentage reduction in price should not matter; we should only compare the dollar savings with the time spent to get that savings. However, we use mental accounts and compare the savings to the size of the account. Since we want a good deal, we're more than willing to make the drive to save $25 in the first case, but not the second. Credit cards are a type of mental account. Somehow, our money gets devalued if we use plastic, which is ironic since credit cards typically cost us more after we factor in the large interest rates. As an example, two professors at MIT conducted a sealed bid auction for tickets to a Boston Celtics game. Half of the participants were told that if they won the bid they would have to pay for the tickets in cash, while the other half were told they would have to pay by credit card. Amazingly, the average credit card bid was about twice as high as the average cash bid! Our credit card mental account can cost us big bucks. Mental accounts can also affect our risk-taking behavior. Finance professor Richard Thaler asked a group of divisional managers if they would invest in a project that had a 50 percent chance to gain $2 million and a 50 percent chance to lose $1 million.

The expected value of the project is a profit of $500,000--not a bad investment--but only three out of twenty-five executives would take the gamble. Why? They were using a narrow mental account that included only one investment project, and were not willing to take the chance of losing on the project. But if they expanded their account to include other similar investments, they might be more than willing to take the risk. In fact, when the company CEO was asked if he would invest in twenty-five such projects, he enthusiastically said yes, because in the long run the company is likely to come out ahead. The moral of the story--if you're too risk averse in your business dealings, you should expand your mental account. Mental accounts also make us evaluate the results of our financial decisions in a faulty manner. Remember my friend Chris's story? Someone he knew made a killing on just a couple of stock investments. When I asked about his friend's other investments, he downplayed their importance--because they were losers. Many investors put their stock gains in one mental account and their losses in another. They then focus on the gains and explain away the losses (e.g., some outside force beyond their control, like an overall downturn in the economy, may have caused the loss). This is a classic case of focusing on the hits and de-emphasizing the misses. If we want an accurate evaluation of our investment performance, we need to expand our mental account to include both gains and losses. So there you are, meditating beautifully. Your body is totally immobile, and your mind is totally still. You just glide right along following the flow of the breath, in, out, in, out...calm, serene, and concentrated. Everything is perfect. And then, all of a sudden, something totally different pops into your mind: "I sure wish I had an ice cream cone." That's a distraction, obviously. That's not what you are supposed to be doing.

You notice that, and you drag yourself back to the breath, back to the smooth flow, in, out, in...And then: "Did I ever pay that gas bill?" Another distraction. You notice that one, and you haul yourself back to the breath. In, out, in, out, in..."That new science fiction movie is out. Maybe I can go see it Tuesday night. No, not Tuesday, got too much to do on Wednesday. Thursday's better..." Another distraction. You pull yourself out of that one, and back you go to the breath, except that you never quite get there, because before you do, that little voice in your head says, "My back is killing me." And on and on it goes, distraction after distraction, seemingly without end. What a bother. But this is what it is all about. These distractions are actually the whole point. The key is to learn to deal with these things. Learning to notice them without being trapped in them. That's what we are here for. This mental wandering is unpleasant, to be sure. But it is your mind's normal mode of operation. Don't think of it as the enemy. It is just the simple reality. And if you want to change something, the first thing you have to do is to see it the way it is. When you first sit down to concentrate on the breath, you will be struck by how incredibly busy the mind actually is. It jumps and jibbers.