John has $4000 in savings to buy an engagement ring for his girlfriend.When his transmission needs to be replaced in his car,John charges the $2000 worth of auto repair.John's decision is a classic example of:

Question

Quizplus · Accepted Answer

John's decision to charge the auto repair despite having savings for an engagement ring shows that he is making false distinctions about his money. He sees the $2000 repair as a separate expense and ignores the fact that it is taking away from his savings for the ring. This is a common mistake people make when managing their finances.

John Has $4000 in Savings to Buy an Engagement Ring