One other form of mental accounting is worth noting. The framing effect addresses how a reference point, oftentimes a meaningless benchmark, can affect our decision.Let's assume, for example, that we decide to buy that television after all. But just before paying Rs 50,000 for it, we realise it's Rs 10,000 cheaper at a store down the street. We would definitely make that trip down the street. If, however, we're buying a new set of living room furniture and the price tag is Rs 5 lakh, we are unlikely to go down the street to the store selling it for Rs 4.90 lakh. Why? Aren't we still saving Rs 10,000?Unfortunately, we tend to view the discount in relative, rather than absolute terms. When we were buying the television, we were saving 20% by going to the second shop, but when we were buying the living room furniture, we were saving only 2%. So it looks like Rs 10,000 isn't always worth Rs 10,000 depending on the situation.The best way to avoid the negative aspects of mental accounting is to concentrate on the total return of your investments, and to take care not to think of your "budget buckets" so discretely that you fail to see how some seemingly small decisions can make a big impact.This is an extract from an article which initially appeared on Morningstar's U.S. website.