Episode 009- Sunk Costs

Hey again, my friend! Angie here! In this episode I’m going to walk you through a subject that’s likely keeping you from letting go of items in your home. I’m also going to give you some tips to help you bust through this way of thinking.

Sunk Cost Fallacy

This is an economic term that has to do with us essentially tormenting ourselves in order to get value out of an event or item after we have purchased it.

The Bad Movie

It’s like what happened to me and Mr. Cozy on our last date night. We decided to order food in and watch a movie through a pay per stream service. As we cozied up on the couch and snuggled in, we carefully selected our movie. I suggested a new movie that had one of my favorite actors in it… and off we went. About 30 minutes into the movie, I was uncomfortable, it really wasn’t what I expected, and the whole thing was just bad… The movie was a flop. I gave Mr. Cozy a side eye and he laughed at me. And yet we continued watching it. We had paid $7.99 to watch it… and if we stopped watching it, we felt we would have lost that money. So we legit suffered through this monstrosity. And I’m sure the next movie night, my movie choosing privileges will be revoked.

This is the sunk cost fallacy… the thinking that if we hang on a little longer we can get our money’s worth out of an object or experience. But the truth is, the money was gone the moment we purchased the streaming video.

How It Relates To Clutter In Your Home

It’s the same thing with the clutter in your home. Some of you may be getting frozen up with letting go of certain items because you “spent good money on them”.

  • These items don’t magically gain value sitting in the back of a cabinet or on the floor of a closet.
  • These items don’t necessarily increase in value the longer you keep them.

And why would we keep something that makes us feel bad or uncomfortable just because we spent money on it?

Value

A little side note on value. During all stages of the journey, our value threshold changes.

Some of you, that are at the beginning of your journey might have a hard time letting go of all the things that you spent money on. Even things you hate and don’t use.

Some of you near the middle of your journey might have a harder time letting go of some of the things that you think maybe you could sell to recoup some of that cost.

But some of you near the end of your journey have realized that no amount of time spent in your life or sitting in a closet will bring that money back into your pocket.

That money was spent at the point of your transaction when you bought the stuff. You could sit for 8-10 hours doing a garage sale or you could completely release a large amount of items no matter the cost to you originally in order to let go.

Release

I say the word release intentionally, because when you’re holding on to these items it’s not serving you. It’s almost as if you have a heavy, thick, giant ugly chain attached to you from those items. That giant ugly chain is regret and remorse and guilt.

Solution

Okay, so you get the idea about sunk costs and how it applies to your stuff.  Now what do you do?

Moving forward,  two things

  1.  we have to deal with the emotions tied to those items.
  2.  we need to be more intentional about where we spend our money.

1 Deal With The Emotions

To deal with the emotions tied to those items you have to let yourself go from those big ugly nasty chains that are tying you to that object. Don’t punish yourself just because you made a poor choice. We all do! I have even recently bought things that I thought that I would use, and I really hate it. It doesn’t happen as often as it used to at the beginning of my journey and even before I started.  Boy let me tell you what, when it happens it does not feel good. So I get you! My number 1 tip to deal with the emotions? Acknowledge them. Then get curious about them. And finally, let the item go. You can’t change the past. You can only make better choices moving forward. You had no clue about intentional shopping when you purchased it. You might not have even been thinking about moving to a minimalist lifestyle. Be kind to yourself and then sell the item for a fair or cheap price or just give it away.

You’ll feel so much better seeing an empty cabinet than you would seeing that item you don’t use and feeling guilty about it.

2 Intentional Shopping

Moving forward, the second part, you just need to be intentional about where you spend your money. If you are going to purchase something, let that purchase simmer. This is where you start becoming aware of why you shop, because it no longer becomes a knee jerk reaction. I also suggest a no spend month (where you only spend money on what you need groceries and bills).

When you intentionally purchase you investigate a product thoroughly before buying. You think of where it would go in your home, how it might make your life better, how often you would use it, how many functions it has, and how good the reviews are, where it’s made, where it is sold etc.

I have some future purchases that I have been looking at for a year.

I’ll do another podcast about intentional purchasing later because this is a topic I could dive deep into all day long.  

Summary

Focusing on the past cost rather than its actual use.

You really get hung up on what you paid for something and you can’t let go of it.

In order to justify the mistake, you hold on to it, hoping it will become useful, you’ll get your money’s worth out of it or you can sell it and get your money back.

The truth is: the money was gone the moment you purchased that item.

No amount of time or use will get that money back.

Mission

Your mission this week is going to be to find one item that you’ve been keeping because of the sunk cost fallacy that plays in your head.

You’re going to ask yourself these questions:

  • is this item valuable to me or am I just focusing on what it cost?
  • if I had to make the same purchase today would I do it?
  • would I do it if I had to pay double?
  • what about triple?

Then I want you to come by the Cozy Minimalism page on Facebook and share your thoughts, share your story you might just inspire someone else too!

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