Minimalist Meditations – who’s counting?

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.

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  • http://www.promptretirement.com Ravi Gupta

    I think your blog post makes a lot of sense and is something I never thought about. I’m one of those people who would stuff my face trying to eat as much as possible to make back my money. It’s funny that use that example because when I eat at another restaurant that isn’t all you can eat I don’t try to make my moneys worth. I understand that I’m paying a premium to be served.
    One new outlook I plan to take on life to cut your losses. There is no point holding onto it since I’ve already lost.

    Thank you!

    -Ravi G.

    • http://minimalstudent.com Jessica

      Hey Ravi, thanks for your comment. You’re so right! I’m guilty of this sometime too, I don’t know what it is about buffets etc. that makes me want to take advantage and ‘beat’ the restaurant, when most of the time in a normal restaurant/shop etc. I’m more than happy to take what is given to me for a set price! Yes, ‘cut your losses’, I guess that was what I was trying to say in a nutshell :)

  • Rach

    Wow, great post! (Are you by chance an Econ major?) Even though I try to be minimalist I struggle with letting go of things that are of absolutely no use to me now, but I paid a lot for in the beginning. Good inspiration. I found your blog a few days ago and have really been enjoying it.

    • http://minimalstudent.com Jessica

      Hey Rach, haha actually I’m a Japanese and Business major (so I’ve done a few Economics classes, yes). Although in my opinion economics can be a little bit shrewd and generalized at times, I have found a few of the its principles make a lot of sense and are quite logical if you apply them to a minimalist lifestyle too!

  • Wendy

    This is one of the best articles I’ve read. It sums up everything about why minimalist reduce items. Also I think this is a very good article to share with others. Do you mind if I share this with some friends?

    • http://minimalstudent.com Jessica

      Hey Wendy, thanks for your lovely comment! Of course I don’t mind, please share it with as many friends as you would like! :)

  • Ling

    Just wanted to say that I’ve recently learnt the term for the scenarios you’ve described – ‘escalation of commitment’. :)

    • http://minimalstudent.com Jessica

      Hey Ling, that’s exactly what it’s called! :)

  • http://laylaandrews.wordpress.com Layla

    Great post. I’m guilty of doing this at all-you-can-eat sushi, and it was so nice not to be stuffed full when we went out to a sushi place that wasn’t all-you-can-eat.

    In terms of getting rid of stuff, I tend to hang on to old hobbies because of the time and money I’ve sunk into them. Also because I like the idea of being someone artistic and creative who paints in their spare time… even though I don’t actually like painting that much.

    • http://minimalstudent.com Jessica

      Hey Layla, I am totally guilty of the hobby thing too, trying to get into knitting is slowly killing my minimalist lifestyle for sure ;)

  • Andre

    I’ve to admit that I never thought of it that way. It’s a powerful idea: Don’t make it worse.
    When I realize that I spent money on something I rarely use or need, I often fail to admit that it was a wrong decision. Instead of letting go I too often try to find a way of using it… although I know I don’t really need it.
    Fortunately, this doesn’t happen often.

    Let’s see how I can apply it to non-monetary, misguided decisions.

    • http://minimalstudent.com Jessica

      Hey Andre, thanks for another great comment! I also try to ‘find a way’ to use things that I know I don’t need either, especially things like tickets and so on, I would go out of my way to make it, even though I don’t really want to be there.

      And yes, there are so many ways to apply this to situations that don’t have to do with money, we can ‘invest’ so many other things like emotions and time that make us overly-committed to things we’d be better of without.

      Thanks again! :)

  • Valeria

    girl you are wonderful, I love to visit this website

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