Sunk costs – why I LOVE donating my bad choices to charity

The dictionary says a sunk cost (a.k.a. the sunk cost fallacy) is an amount paid that has already been incurred and cannot be recovered.

In simple speak: a sunk cost is when we make a buying mistake and obsess over it. Once an expense is made, there is no way to undo it.

Sunk costs are backward looking decisions (and costs) that we can never get back.

Famous examples of sunk costs include:

  • Wearing that expensive winter jacket in our closet that collects dust. For one reason or another, we never wear it. But we cannot donate it away, because we paid good money for it.
  • Maybe we suffer through watching a bad movie just because we paid for it.
  • We put our business into bankruptcy hoping things will turn around and get better.
  • Gambling the rest of our money because we have already lost so much of it.
  • Or even worse, maybe we have that loser friend who sucks the energy out of the room. And we cannot cut off the relationship, because we have known them since childhood and do not want to throw away years of memories.

Sunk costs are backward looking decisions (and costs) that we can never get back.

While most people freeze about honoring sunk costs, I embrace it as the cost of doing business in life. Instead of hoarding purchases (or experiences) from the past, I instead rid them from my life – fast. It helps me to progress into the future and improve my life.

I make sunk costs irrelevant in my decision-making process. I have no problem donating a $249.99 bread-making machine to charity if it collects dust on my shelf.

And I no longer hang out with people who bore me. Instead, I only do things that are a hell yeah!

Yes, letting go of life’s sunk costs can be intense and bold. But I embrace the cleansing – even at the risk of upsetting people.