Sunday, January 29, 2017
Understanding the "Sunk Costs" in our lives (and learning to let them go)
As a restless and wayward student, I studied a lot of different things as a young man.
But none of it really stuck. I dropped out and majored in travel instead. You didn’t have to spend so much money on textbooks.
But I did really like one course I took on Economics during those years. An old blustery dude with a beard made an impassioned plea that EVERYTHING was economics. History, politics, sociology. You name it. I can still remember his words.
“And many of you will live your lives chasing after “sunk” costs. You will stay in jobs you hate, relationships that no longer work, and in investments that are doomed to fail. And what is a sunk cost exactly? It’s when you tell yourself that you can’t quit because of all that time or money you've already spent. Sometimes in economics, we have to be shrewd enough to know when we have failed and release a losing hand with a lesson learned.”
I was 19 when I heard that. But I never forgot it. I was even a little irritated by his self-assurance. You don’t know me! How do YOU know I’m going to do that??
But somehow the bearded guy knew…
Which raises a good question about how sunk costs work in relationships. Many, many people I know both personally and professionally stay in relationships that no longer work for them. They stay because they’ve been together so long, or maybe because they think the other person will change. Will alter their course.
But this seldom happens. The best predictor of future behavior is past behavior. It’s another solid economic principle.
The workplace is another area we tend to use sunk costs. We stay at a job we dislike for years, because really, who wants to start over again? Humans have a fascinating ability to rationalize in all directions. If we’ve made a shitty investment, we start to see the positives in the decision to help salvage our own egos. Research in social psychology demonstrates this principle again and again.
Which is not to say there isn’t value in trying to make things work. In our relationships and our jobs and our friendships, we’re always going to have moments of boredom and frustration. We start to imagine greener grass and more exciting options. That’s just the nature of the human imagination.
But we also have to know when to release a losing hand.
An important example of this comes in relationships that have become abusive. Although physical abuse is an awful and easily demonstrable example, many kinds of relationships can become abusive. Maybe it’s someone who belittles you, or is verbally abusive, or perhaps emotionally manipulative. But all abusive relationships tend to follow a predictable pattern of tension building, abusive behavior, a honeymoon period, and then rinse and repeat.
And denial is the fuel that keeps this cycle churning.
Perhaps the biggest tragedies of sunk costs are the amount of time they steal from our lives. As a therapist, I’ve heard many sad stories of people deeply saddened by the time they’ve wasted that they can never get back. Years in relationships without love or passion, decades in jobs where they are unappreciated and unfulfilled.
But I’ve also heard a lot of happy endings to these stories. People that went back to school in their 50’s and started a new life. Men and women who finally had the courage to leave an abusive relationship and start over after overcoming their fear of the unknown. People that chose to pursue a dream after years of dormancy and reticence.
And these people all had one thing in common. Their desire to change had finally become stronger than their desire to stay the same. They got angry. Got motivated. Finally realized that they weren’t promised an unlimited amount of time here.
Henry David Thoreau said, “The cost of anything is the amount of life you exchange for it.” It’s a brilliant way of looking at it. Every minute we chose to spend on things that don’t bring us fulfillment or happiness is stealing time from something that might.
So as we enter into a new year, I pledge to think about what “sunk costs” exist in my own life. In the end, time is all we have, and we don't have an unlimited amount of it to spend. I urge you to do the same. To think about the things or perhaps even people in your life who take up your precious time with little or no return.
Sometimes letting go is the healthiest thing we’ll ever do.