When you pay for something, you tend to want to see it through, even if it’s long past the point where it’s worth it to continue. This is typically viewed as a negative, but if your sunk costs go to something healthy, it can help encourage positive habits.
As personal finance blog Done by Forty explains, sunk costs keep you in a pattern even when you might otherwise stop. For something like fixing a car that’s no longer worth the repairs, this isn’t that great. However, if it can help you stick to a gym membership or eat healthier, the resulting behaviour is beneficial. Your money can pressure you to do better:
We typically think of the sunk cost fallacy as something bad: something that creates sub-optimal, illogical behaviour. But in the case of my sister’s gym membership, it’s increasing a healthy behaviour. She’s going to the gym more often, because she doesn’t want that $70 to go to waste.
Of course, this only works if the sunk cost actually motivates you. If you’ve wised up to the sunk cost fallacy enough in other areas of your life to avoid wasting time on something just because you spent money on it, then this might not be helpful. If it can help influence your decision, though, use your purchases to help steer you towards the decisions you should make.
When Sunk Costs Help [Done by Forty via Rockstar Finance]
Picture: W_Minshull/Flickr
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