Sunk Cost Fallacy
I have encountered the Sunk Cost Fallacy and Loss Aversion in my past. I was struggling on a course I didn’t enjoy and I was in a relationship (loss aversion) that I had been unhappy in for a long time. Both of these situations were happening at the same time and contributed to my increasing state of anxiousness and panic attacks. I needed to take action but was stuck.
The Sunk Cost Fallacy can show up in many different situations and usually involves some kind of investment; this could be financial, time or even social. We may choose to prioritise the invested time in the past, not prioritising the present and unable to visualise the potential benefits for the future. In my situation, I didn’t recognise what affect my present situation was having on my health and happiness until it was too late and my body rebelled! The investment of time in both my relationship and university course made me lose sight of what I wanted and what would make me happy; neither of which were doing that. My body told me what I wasn’t ready to hear but needed to.
I chose to look forward. I visualised what my life could look like based on what makes me happy. I visualised that happiness and then worked backward to recognise the steps I needed to take to get me there. This is a technique I now use often in Positive Psychology sessions with clients. This can enable a person to truly see what they want, disregard anything that might get in the way and then work out the steps to move you towards that goal.
If you are encountering a decision that is difficult and you have invested lots of time, money or effort into, and you are seeing that the pay off to continue isnt favourable over another potentially better outcome then consider these points to make the right decision for you.
Set clear, defined goals from the start - this makes is easier to evaluate if this is moving you towards your goal - focus on the objectives rather than the investments and see if these are more aligned to your long term success or ability to flourish.
Make data driven decisions - I know this sounds cold, but choosing to analyse the decision, even if it involves deep emotions, can help you recognise if continuing on is the right path for you to follow. Find your inner Vulcan and use logic to help make that decision.
Use a Decision Matrix - Evaluate the options within a framework to weigh up the potential future benefits agains past investments - focus on what will truly benefit you in the future. My example would be, I am unhappy with this course, I don’t enjoy it as a job role for my future and can’t see me being motivated to excel in this role; another option is to take another route using my established skills and character to help people in the way I know I can truly excel in.
If you would like to explore your options to move you towards your desired future then please, get in touch and book your free chemistry session with The Calm Coach.