Tuesday, August 10, 2021

Confronting Sunk Cost Fallacy

One of the biggest obstacles to starting in on minimalism is sunk cost--not wanting to get rid of something solely because we've spent money on it, even if it's something we don't like. Sunk cost fallacy is the financial equivalent to emotional sentimentality, and can hold new minimalists back from discarding the right items.

How can I identify sunk cost fallacy?

The phenomenon of sunk cost fallacy is a set of behaviors where we keep trudging along with an object long past its use or our interest in it, and we do so only because it cost us money. It's a trap where we artificially attach ourselves to items just because we had to pay for them. A good example is when you move to a new apartment or house and you take along the same box of assorted phone chargers, power adapters for other devices, etc., over and over again with each move. Those items cost money to buy, cost money to replace, and prompt a lot of "what if I need them one day?" questions. But in the end, the items are ultimately just stuff taking up space. They have no real bearing on your future plans, short- or long-term.

How can I combat this sunk cost fallacy?

Well, it comes down to common questions I pose to new minimalists:

  • Do you want this item to come with you into the future?
  • Does the item represent some crucial part of your personality and lifestyle?
  • Do you enjoy using the item?
  • Are you happy about the financial the cost of the item?
  • Are you happy about the emotional cost of the item?

If the answers are all a resounding "no", then it's likely you've kept the item in question due to the sunk cost trap. If you did indeed answer "no" to all of those questions, congratulations! You've identified one of your own sunk cost items and can now discard it, and take note of how it felt to get rid of it.

Discarding sunk cost items might sting at first, especially if you're dealing with (or have dealt with) financial insecurity. In that case, it might help to resell the item or donate it to a charity that can use it, if possible. Once you discard a few sunk cost items without concerning yourself with recouping some of the cost, it will only get easier to discard more.

My own sunk cost items

I'm no different from anyone else when it comes to sunk cost. Or at least, that's how I started my minimalist journey. Before I dove into minimalism, I had spent the previous six years doing my best to survive financial instability--inconsistent hours at my job combined with the cost of state college tuition made it very hard to get by even with the help of student loans. It was very difficult for me to part with my massive piles of stuff. Even the $4 dresses I bought at thrift stores were hard to discard, because I knew I wasn't going to get that $4 back.

Eventually I realized that so much of that stuff was costing me a lot of emotional energy, and my desire to hold onto it actually cost me a good chunk of change. It took about eight car trips back and forth from my college town rental to finally get all of the stuff I wanted to keep to my new home once I got a better job and had to move. I started to think of it all differently: was a moving box full of $4 dresses worth the gas money of a 250 mile round trip (about $22 in gas back then)? No, they weren't. I ended up parting with a whopping thirtyish 13-gallon trash bags of stuff to donate over the first six months of my minimalist adventure... stuff that I had decided was so damned important that it had to make a 125 mile trip to get from the college town to the work town. It wasn't just clothes--it was art supplies I'd bought hoping to distract myself from the rigors of grad school; it was shoes I'd bought and worn through because I never just bought one nice pair of boots, I "needed" many bad pairs; it was an expensive bottle of perfume here and there that I'd gotten for myself when I needed a pick-me-up.

None of what I discarded those first six months needed to follow me into the future. I can't even remember the specifics of what I discarded--just the general categories and how much a few things would have cost. It's been years now since those items all left my possession, and in those years I haven't felt the urge to go out and acquire nearly as much as I discarded (partly because I finally started buying better-made clothes and boots).

Once I reframed "How much did this cost me?" to "How much will this keep costing me?", it got a lot easier to discard all sorts of things. It's also helpful to include the emotional cost of items, which can absolutely be a huge expenditure. 

Items that don't reflect you or your lifestyle should find their way to a new home, no matter how much money they cost to buy. They might just end up costing more money, time, and energy to keep. If a costly item doesn't bring you joy, accept the sunk cost... and sink the item into your discard pile!


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