The viral "girl math" trend: irrational rules for spending money

I've done "girl math" in the past. And, to be honest, you most likely have as well.

"[If I] return something at Zara for 50€ [and] bought something else for 100€, it only cost me 50€."

"If [I] don't spend enough to make free shipment, I'm losing money"

"Girl math" is the latest TikTok trend to become popular. The hashtag #girlmath has over 200 million views and is full of videos in which viewers describe how they think about money, how they spend it, and/or how they save it.

Considering I am a certified Behavioral Science nerd, I am always asking myself, "Does this have anything to do with behavior?" and "Should I make a blog about it?" So here I am, proving why "girl math" has a great deal to do with behavior...and why we should name it "irrational math" instead of "girl math."

What are some well-known examples of "Girl Math"?

• What if I paid in cash? It is completely free.

• If I buy Taylor Swift concert tickets a year in advance, the ticket is completely free when the time arrives (the same is true for holiday holidays).

• If you don't buy anything while it's on sale, you're wasting money.

• If I returned something for 80€ and bought something for €100, I really only spend 10€

Behavioral Economics is concerned with how humans make decisions. Dollars and Sense: How We Misunderstand Money and How to Spend Smarter by Dan Ariely is an excellent book to learn more about this "girl math" and how to improve our spending behaviors.

"Girl math" is not only reserved for girls, it's all about humans' limited rationality and it mainly focuses on four Behavioral Economic principles:

• Mental Accounting: We have a tendency to compartmentalize financial decisions in our minds. We hold money in separate small mental accounts that are entirely fictitious in our minds. For instance, if I have a mental shopping account of 100€ and return something for 20€, I now have 120€ to spend on apparel.

• Anchoring: We have a tendency to base our judgments on a certain statistic to which we have already "anchored" ourselves. When we see an item we've been desiring for a month cut down from its original price, we're tied to the original price and feel like we're now making "extra" money because of the discount.

• Sunk Cost (flipped over): Getting a refund is the same as getting free money. This is a variation on the traditional "sunk cost." Normally, these expenditures are indefinite and must be maintained. However, the logic underlying "girl math" is that the money you spent is buried, and returning it implies that whatever you buy with that money is essentially free.

• Pain of paying/Loss Aversion: The pain of paying varies depending on the method of payment (cash versus card). It feels like it's free after you pay in cash. However, if your bank account (which some people check every day) falls by large amounts, the distress is magnified. That is why, when I pay with cash, it feels free since my bank account has not been depleted, not even a cent.

And that is why sometimes, only sometimes, TikTok can be a great way to learn the uncover rules of behavioral economics and understand how and why our minds function the way they do. Whether you're female or male, think about the next time you're doing "irrational math" and how do you justify it? I mean, it's occasionally satisfying to explain the amount of money we've just spent on frivolous items. But what can I say... "If I don't buy my coffee today, I am making money"

This tendency has no positives or negatives, but rather an enhanced knowledge of how we truly think about and spend money. Having said that, often all we need is a little nudge to change our spending patterns. If you want to retrain your brain to save money, I recommend reading the following two posts:

• Simple and sneaky ways to save money

• Rewire your brain - control temptation and natural desire to spend

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We are irrational, and we will continue to make blind judgments. The crucial point is that we become conscious of and urge ourselves to maximize our utility to gradually become more reasonable spenders.

ps: "People are irrational - and predictably so"