This paper explores how behavioral economics helps us understand why people make certain choices when it comes to spending money. One key theory is prospect theory, which shows that people are more afraid of losing something than gaining something. This fear of loss can influence how consumers make decisions, like holding onto things they already own. Another important concept is mental accounting, where people keep track of their finances in their minds. Overall, behavioral economics plays a big role in how we choose what to buy and how we spend our money.