Most people don’t believe that ‘Big Brother’ really exists. Sure there’s security cameras in a few public places, but there’s not a lot of people that believe that there’s somebody keeping track of them 24/7.
Until it’s time to eat a buffet.
Then they go crazy. They eat and eat and eat, trying to get their ‘money’s worth’… as if there is somebody keeping tally if they get what they paid for.
But there isn’t. There is nobody to judge you.
This is the principle of sunk costs. When you’ve already paid for something, and there’s no way you can get it back, then the best you can do is try not to make things worse.
So if you’ve already paid, for example, $15 for an all-you-can-eat buffet, you can either eat about $15-25 worth of food, or stuff yourself with junk until you’re about to burst. Either way, you’re still going to be paying the same amount of cash and the register when you leave… except that you’ll also pay the price for a stomachache later on or in the long term, you’ll pay the price in your weight or health.
There are so many examples in real life of people ‘trying to get my money’s worth’ but end up paying in other ways. Think about the principle of sunk costs in these scenarios:
- Business people push on with projects that aren’t working because they’ve already invested a significant sum of money.
- People refuse to change their minds about certain things because they’ve already spent a lot of their lives believing things are one way and not the other.
- Toxic relationships are held onto because those involved have already put in a lot of time and emotion into the relationship and don’t want it to be for nothing.
- People who live in houses with fixed utility bills use way more gas/electricity/water. They waste environmental resources because there is no incentive to use less.
- Junk is stored in people’s garages etc. because the owners don’t want to sell it knowing they won’t get back what they paid for it.
Humans don’t like to ‘waste’ things they’ve worked hard to obtain (mostly money) and they don’t like to admit they’re wrong. Of course this doesn’t mean that we should simply throw money away by paying for things and not using them, but we should remember that hanging onto sunk costs is rather irrational behavior – usually trying not to ‘waste money’ uses up more resources, or as economists like to call it ‘throwing good money after bad’.
Resources that have been irrecoverably spent shouldn’t influence your future decisions on what you do with it.
As minimalists, we should keep the idea of sunk costs in mind. When you hang onto things you’ve already paid for, you’re still paying for it in some way – whether it’s cash/time to maintain it or to store it (by needing to rent a bigger house).
If you don’t need it, and you can’t return it, just get rid of it now. Give it to someone who needs it or sell it, even if you don’t get back the price you paid for it. Nobody is going to knock on your door and exclaim that they will pay you RRP for it, so just sell it for whatever somebody will pay. Something is better than nothing (or minus cash!). Plus, the benefits you get from peace of mind from getting rid of clutter and knowing you’re not wasting even more precious resources should be enough of a reward.