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As Christians, we want to honor God with our decisions. However, our finite minds can easily make bad decisions without us even realizing it. Today, I’d like to talk about something that often leads many of us to regret and suffering, even though we may be convinced we’re actually making the right decisions. Let’s talk about the sunk-cost fallacy.
A brief explanation
The sunk-cost fallacy is one of those things that’s much easier to understand when you see it. However, a basic understanding will help us better see how such a simple concept finds its way to so many areas of our lives. The term itself comes from the idea that we can recover costs that we’ve sunk into something.
At its core, it goes like this: When we’ve invested our money into something, we’re likely to continue spending money on it so that we don’t waste what we’ve already spent. We believe that if we spend money on something and walk away, we’ve wasted whatever we’ve already spent. Of course, it doesn’t just apply to money. We’ll do the same thing when we invest time or effort into something as well.
Here’s a lighthearted example: You spend $50 to go to an amusement park. After your first ride, your neck is bothering you and you feel a bit nauseous. Looking around at all the rides has you feeling nervous, but that $30 isn’t going to waste! So you get in line for another ride. And another. Each time, you feel worse and worse, never enjoying yourself and, in the end, you’ve spent $50 to spend several hours feeling terrible. That $50 was already spent, but bad decisions were made to avoid the feeling of losing that money, which in the end created an even worse situation than if you’d called it quits, bought a corn dog, and left.
In the end, the sunk-cost fallacy leads us to engage in poor choices and unpleasant behavior, all in an attempt to recover something we’ve already invested. Let’s look at some ways we do this.
How we fall for the fallacy
Over-eating
The Problem
Going out to eat is always a money investment because we pay for the convenience of not having to cook or clean. The bigger the family, or fancier the restaurant, the more we feel the pressure on our bank account. Since we want to use our money wisely, we want to make sure we don’t waste anything when we eat out. So when we pay so much for our food, we eat every little bit of it that we can, often to the point of leaving the restaurant feeling miserable.
And that’s the problem. We pay money to relax and enjoy something, and so often leave feeling sick. We eat beyond the point of our needs, demanding that our bodies digest more than they can handle. We let our fear of wasting money lead to unhealthy behavior.
The Truth
Whether we ordered too much or were given more than we need, we feel compelled to eat everything we have so that our money doesn’t go to waste. However, that money is gone, regardless of what happens to our plate of food. All we can do is enjoy what we have before us, regardless of how much may be left.
It’s important to view food in its proper light, as a means of enjoyment and sustenance. Then we can see that by eating more than we need, we actually misuse what we paid money for. Eating more than we need is both unpleasant for us and unhealthy for our bodies, resulting in this fallacy costing us much more than the money we’re afraid of wasting.
Fixing lemons
The Problem
Whether it’s a car, washing machine, or even a bad tooth, everything in our world needs to be fixed. However, the phrase “throwing good money after bad” is firmly rooted in the sunk-cost fallacy. When we have something that keeps breaking down, we’ll keep putting more money into it because we fear that giving up and replacing it will waste all that money we’ve already spent on fixing it.
The Truth
Sometimes it can be worthwhile to keep something around. However, we’re much more likely to keep something far longer than we should because we think that by keeping it around and continuing to fix it, we’re saving money. Yet if we stop and look at what it will cost us to keep fixing something that will eventually be replaced anyway, we realize that we actually spend far more money trying to hang on to it, often with much more frustration.
Toxic relationships
The Problem
There are people in our lives that we’ve known for years. As time goes on, however, we often find ourselves traveling in very different directions. This is especially true for Christians as we are made more and more like Jesus Christ, while others continue embracing a world that hates Him. Yet when we’ve invested time into cultivating a friendship, it can be so hard to let it go. We know a friend, family member, or even a romantic relationship is harmful to our relationship with Christ, yet we still allow them to remain close enough to influence and affect us because we don’t want all those years to go to waste.
The Truth
Those years we’ve invested in a relationship are gone. That leaves us with a very simple choice: Do we give more time and potential heartache to the relationship, or do we cut something harmful from our lives today?
Obviously, this one is much more difficult for anyone to consider, especially for those who want to see that person come to Christ. However, many of us are afraid of being honest and admitting that they influence us considerably more than we influence them. Each situation is different, and not all harmful relationships need to end in a complete separation. However, our current and future spiritual growth is far more important than the fear of wasting our previous years.
Why should we care?
The sunk-cost fallacy can infest so many areas of our lives. It makes us stick with a TV show or music concert that we don’t enjoy, yet we waste more time by sticking with it so we don’t “waste” whatever we’ve already invested. We stay in a job far longer than we should because it’s where we’ve always been. On and on the lists could go, and there’s no doubt that many of you have thought of areas where the sunk-cost fallacy has led to your own poor decisions.
However, avoiding the sunk-cost fallacy isn’t strictly a spiritual problem. There are countless articles and discussions out there about the topic. Yet as Christians, we have far more reason to care, one that goes beyond simply wanting to avoid unpleasantness.
Acquire wisdom! Acquire understanding! Do not forget nor turn away from the words of my mouth. “Do not forsake her, and she will guard you; Love her, and she will watch over you. (Proverbs 4:5-6)
We want to honor God with our decisions. We want to use wisdom not just because it benefits us, but because pursuing it means that we are loving what God loves. Though there are countless reasons to care, here are 3 reasons why it’s important to use wisdom when we’re faced with the sunk-cost fallacy.
We want to use our resources well
There is precious treasure and oil in the dwelling of the wise, but a foolish man swallows it up. (Proverbs 21:20)
If we believe that God has given us everything we own, then we want to be good caretakers of it. Thus it’s humorous that the fear of wasting our money actually leads us to waste more money. We will spend money in an effort to somehow recover what was already spent, yet in the end our bank accounts are often poorer for it, and we still have nothing to show in the long run.
We often compromise our self-control to our destruction
But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control; against such things there is no law. (Galatians 5:22-23)
To give up self-control is to allow ourselves to go beyond what we know we should. We eat beyond satisfaction, spend over the constraints of our budget, and keep things in our lives that offer no benefit. We do all of this while knowing we shouldn’t, yet we refuse to stop even in the face of the misery it brings. When we see this fallacy for what it is, we are much more likely to use wisdom in exercising self-control, even if our emotions tell us we should keep eating, keep spending, and keep getting hurt.
The fallacy is often rooted in fear, pride, or shame
He who conceals his transgressions will not prosper, but he who confesses and forsakes them will find compassion. (Proverbs 28:13)
When we give in to the sunk-cost fallacy, there’s always something we tell ourselves to give a logical reason for our behavior. Often, our reasoning breaks down into three areas:
- We fear losing something we’ve invested in, so we engage in harmful (and arguably irrational) behavior rather than face loss
- We’re too proud to admit that we’ve made a mistake and used our resources poorly, preferring to trudge ahead and cause further damage rather than cut our losses
- We’re ashamed of the money we’ve spent or the time we’ve already invested, convincing ourselves that we can somehow make it right by just investing a little more
When we see that we’re falling for this over and over again, we can start to trace our reasoning behind it all. We can start seeing how this flawed thinking causes us much more harm than we ever thought. Most importantly, we can see the areas where we let fear, pride, and shame take control away from our faith in God and the wisdom He gives.
Everyone falls victim to this fallacy in one way or another. It’s one of those things that is so subtle that it makes perfect sense until it’s clearly pointed out. Don’t lose heart when mistakes are made. Instead, let us all continue to see the areas where our own wisdom fails us so that we can see even more areas where we need the grace and wisdom we need from our Heavenly Father.
Trust in the LORD with all your heart and do not lean on your own understanding. In all your ways acknowledge Him, and He will make your paths straight. Do not be wise in your own eyes; Fear the LORD and turn away from evil. (Proverbs 3:5-7)
