Have you ever felt like you had to keep going with something even though you weren’t enjoying it anymore, just because you had already spent time or money on it? That’s called the sunk cost fallacy.
The sunk cost fallacy happens when people feel like they have to continue investing resources into something because of how much they’ve already spent on it, even if it’s not a good use of their time or money anymore. Psychologists explain this as a type of cognitive bias that makes it hard for our brains to “let go” of past costs.
Instead of making decisions based only on future benefits, the sunk cost fallacy means we take into account what can’t be gotten back (sunk costs) too much. But sometimes it’s better to accept a past mistake and move on instead of throwing good resources after bad.
How does this limit our potential?
When sunk costs unconsciously influence our choices, it can really hold us back from happier, more fulfilling options. We may stick with things like an unfulfilling job or relationship long past their expiration date. Or we keep pursuing failing business ideas or hobbies just because we started them already.
This can stop us from growing in new directions. It also means we miss out on chances to improve our lives. The sunk cost fallacy risks trapping us right where we are instead of unlocking our full potential.
How to overcome the sunk cost fallacy:
To avoid being stuck by past costs, reflect often on your goals and values. Make unemotional pros and cons lists. Seek outside perspectives too. Ask whether sticking it out just prolongs something that isn’t working versus starting fresh. With the practice of rational decision-making over emotions, you can course correctly in ways that move you closer to the life you want. Don’t let sunk costs from the past limit where your future leads.
