I am so intrigued lately by the concept of ‘sunk cost fallacy’ and how that plays out in my life.
Sunk cost fallacy is our tendency to keep investing our resources (e.g. time, money, energy) into projects, people or situations that no longer serve us. The costs no longer outweigh the benefits, but because we’ve already invested so much we’re reluctant to change course.
I’m usually pretty good at cutting my losses and moving on (thanks, ADHD brain!), but I’ve noticed this bias showing up in a few ways:
- Hanging onto expensive items of clothing that don’t suit my style or don’t fit anymore.
- Continuing to eat when I’m full, especially if the food might go to waste.
- Maintaining relationships that I’ve invested considerable time and energy in, even though I know the relationship doesn’t meet my needs.
- Starting a new hobby and purchasing the supplies, but not wanting to quit when I inevitably change my mind.
- Persisting through a movie, TV show or book that I’ve realised I don’t like.
These things seem like they’re okay as isolated events, but what about adding all these situations up and extrapolating that across a lifetime?!
Think of all that wasted time, energy and money detracting you from your goals!
Being aware of sunk cost fallacy is shining a light on areas that are keeping me small and limiting my potential. To make sure I’m not caught up in some kind of sunk cost whirlpool, these are the questions I’ve been asking myself lately:
- Does this align with my future vision?
- What would my future-self say about it?
- What would happen if I stopped investing my resources and cut my losses?
- What small step can I take now that will help get me back on track?
- And, to help me minimise the effects of a ‘loss’, what have I learnt or gained from this experience?
When you know better, you can do better, right?
