Sunken Costs: Don't Throw Good Money After Bad


Don't Throw Good Money After Bad: A Simple Explanation of Sunk Costs

Sunken Costs: Don't Throw Good Money After Bad

Imagine this: you spend months training for a marathon, only to wake up on race day feeling like a slug. Should you drag yourself out of bed and push through the pain, or hit the snooze button and call it quits? It's a tough call, but before you decide, consider the sunk cost fallacy.

A sunk cost is any money or resource you've already spent that can't be recovered. In our marathon example, the sunk costs are the months of training, the registration fee, and maybe even those fancy new running shoes (ouch!). But here's the key: sunk costs have no bearing on your future decisions. Whether you run or not, those costs are already gone.

So why does the sunk cost fallacy exist? We humans have this thing about wanting to get our "money's worth." If we've already invested something, we feel pressured to see it through, even if it's no longer the best choice. We're afraid of "wasting" what we've put in, even if continuing will bring more pain than gain.

But that's throwing good money after bad. Just because you've sunk some costs doesn't mean you have to keep sinking more. If running the marathon will ruin your health or make you miserable, listen to your body and skip it. You can always train for the next one!

Here are some signs you might be falling victim to the sunk cost fallacy:

  • "I've come this far, I can't give up now!"
  • "I just need to put in a little more effort and then it will get better."
  • "But I spent so much money/time on this!"

Think of sunk costs like spilled milk. You can't unspill it, so crying over it won't help. Instead, focus on making the best decision for the present and future, regardless of what's already happened.


  • Sunk costs are gone and can't be recovered.
  • They have no bearing on your future decisions.
  • Don't throw good money after bad.
  • Make the best choice for you now, even if it means letting go of the past.

So next time you face a tough decision, beware of the sunk cost fallacy. Don't let the ghosts of past investments haunt your future choices. Embrace the freedom to start fresh and make the best decision for you, right now.

Happy choosing!

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