The Sunk Cost Fallacy - Letting Go Before You're Sunk

My Concert Conundrum

So, here's the deal. A while back I bought tickets to see one of my favorite 80’s bands, Journey.  I was obsessed with this band back in the day. With hits like Don’t Stop Believing, Faithfully, Open Arms and more, who couldn’t be? But as the concert date got closer, my interest in going waned. I had a long week out of town, and a quiet evening at home with my wife watching our favorite shows sounded much more appealing. The problem? I couldn't shake the feeling that skipping the concert would mean wasting the money I'd spent on the ticket. It was like my wallet was guilt-tripping me into going. And that, my friends, is the sunk cost fallacy in action: urging me to waste my evening and more money (can’t go to a concert and not buy swag, right?), just because I'd already spent money on tickets - the more we invest in something, the harder it becomes to abandon it, even when it's the best choice.

What is The Sunk Cost Fallacy?

The sunk cost fallacy is a cognitive bias that occurs when we continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), rather than on a rational look at future outcomes. It's like eating a meal you don't enjoy just because you've paid for it, or continuing to read a book that bores you to tears simply because you're halfway through. We feel that by completing the action, we're somehow recouping our initial investment, even when it serves no benefit or, worse, costs us more in the long run.

Practical Steps to Overcome the Sunk Cost Fallacy

1. Pause and Assess: Before you make another move, stop. Ask yourself, "Am I continuing because I genuinely want to, or because I feel like I have to justify past investments?" If it's the latter, it's time to reconsider.

2. Quantify Your Losses: Sometimes, putting a number on what you're actually losing can help. Sure, you might lose the $50 I spent on the concert ticket, but what about the cost of a miserable evening? Or the lost opportunity to do something you'd truly enjoy?

3. Seek External Perspectives: Chat with a friend who's not invested in the situation. They're likely to give you a clearer perspective, free from the weight of your sunk costs. If they say, "Just stay home," it might be the nudge you need to listen to your gut.

4. Practice Reflective Decision-Making: Make decisions based on the present and future, not the past. Will going to the concert tonight make you happy? Will doing something else add more value to your life right now? If yes, it's okay to let go.

5. Embrace Flexibility: Give yourself permission to change your mind. Life's too short to stick with something that doesn't bring you joy or satisfaction just because you've already invested in it.

Kicking Guilt to the Curb

In the end, I didn't go to the concert. And you know what? The sense of relief was immediate. I spent my evening in the best possible way—watching a movie with my wife, sprawled out on our couch with microwave popcorn that didn’t cost $8.50. It was glorious. The sunk cost fallacy almost had me, but by taking a step back and evaluating what I truly wanted, I managed to break free from its grasp.

So, next time you find yourself wrestling with a similar dilemma, remember: it's not about what you've already invested, but what you stand to gain by making a choice that aligns with your current needs and happiness. Let go of what's holding you back, and move forward with confidence on a new, more valuable path.