No use crying over Sunk Costs
How following this basic principle of economics can bring your life more joy.
Once upon a time, my bag of chips got stuck in the vending machine. I had already paid for it, and there was no getting my money back, but there was my snack, sitting there. Stuck. Taunting me. I tried shaking the vending machine—no go. My arms were too wimpy. So I looked around for another solution.
Above the chips was a candy bar. I did not want the candy bar, and would not have bought it, if I were not trying to recover my chips.
But you know what, I wanted those chips really bad, so I went ahead and bought the candy bar, hoping it would knock down my chips on it’s way out.
And then they BOTH got stuck!!
The candy bar was twice as much money as the chips, so in the end I paid three times the amount I had planned to when I approached this devil machine, with no results. Even if my candy bar ruse had worked, I would still have paid more than I planned, and eaten more calories than I wanted to.
And that was the first time I consciously thought about the principle of sunk cost.
A sunk cost is a cost that has already been incurred and cannot be recovered. A sunk cost differs from future costs that a business may face. Sunk costs (past costs) should be excluded from future business decisions because the cost will be the same regardless of the outcome of a decision.
This has always been summed up for me by the old adage, “There is no use crying over spilled milk,” or, in other words, “Move on and do better next time.”
I see It in my life everywhere now.
In a dress that I bought two years ago, and never wore. It is now out of style, and will not bring me joy or the respect of others to wear it. I allow myself to get rid of it, because of the principle of sunk cost. I can’t get the money back, and I might as well not let a poor past mistake dictate the optimal happiness of my future. A closet cluttered by things we don’t want, never made anyone happy.
Or when I paid for a bouquet of flowers, that died in two days. I am not going to keep their sad dead husks around my house to “Get my money’s worth,” because they were expensive. It is a sunk cost, and keeping them till the flies gather will not make them have cost any less. Next time, I will just buy less expensive flowers, or a potted plant.
What I feel like I have learned from this is, don’t let past mistakes take your present and future joy. Make as smart of decisions as you possibly can, but when you inevitably make a mistake, learn from it and start fresh, rather than digging yourself deeper.
