This is the time of the year when a lot of companies are giving away annual bonuses. Festival and annual bonuses are things which people look forward to. The reason most of us do that is because bonus is like a 'windfall gain', where you receive a lot of money in hand in addition to your regular income. So bonus money is spent primarily on a lot of 'discretionary' purchases.
If you rationally look at your bonus, it is nothing but money you ought to have received with your salary every month. Would you have treated the money the same way had it been divided equally and given as part of your salary every month? Most of us would not have treated it the same. The reason for this is a phenomenon in behavioral finance called 'Mental Accounting'.Instead of looking at the big picture, people tend to mentally compartmentalize their assets into different "buckets," which they manage independently, and treat differently.As a result, it's easy to lose sight of the fact that each category of money (regardless of source) contributes to overall wealth.
