{"id":629,"date":"2025-08-19T07:13:38","date_gmt":"2025-08-19T12:13:38","guid":{"rendered":"https:\/\/julialipscomb.com\/?p=629"},"modified":"2025-08-30T09:32:34","modified_gmt":"2025-08-30T14:32:34","slug":"definition-of-the-day-sunk-cost-fallacy","status":"publish","type":"post","link":"https:\/\/julialipscomb.com\/?p=629","title":{"rendered":"Definition of the Day: Sunk Cost Fallacy"},"content":{"rendered":"\n<p>A <em>sunk cost expense<\/em> refers to the loss of time, money, or effort, which you can&#8217;t get back. It\u2019s one of the most basic economic concepts, and it can work for both consumer and commercial finance. If you let sunk costs influence your future decisions, even when it\u2019s not in your best interest, it may cause you stress or decision paralysis. According to Investopedia, <a href=\"https:\/\/www.investopedia.com\/terms\/s\/sunkcost.asp\" data-type=\"link\" data-id=\"https:\/\/www.investopedia.com\/terms\/s\/sunkcost.asp\">the sunk cost fallacy causes people to stick with a failing decision because they already paid<\/a> for it &#8211; it\u2019s loss aversion.<\/p>\n\n\n\n<p>For example, I stayed in a hostel that offers a free drink to every guest, though I didn\u2019t end up redeeming the coupon. It\u2019s OK because I didn\u2019t lose anything.&nbsp;<\/p>\n\n\n\n<p>It\u2019s OK to pivot. Think long-term. You can only carry so much. You don\u2019t have to redeem every coupon.<\/p>\n\n\n\n<p>Although you can save a lot of money. Here is a resource from Nerdwallet<em><a href=\"https:\/\/www.nerdwallet.com\/article\/finance\/how-to-coupon\" data-type=\"link\" data-id=\"https:\/\/www.nerdwallet.com\/article\/finance\/how-to-coupon\"> on 8 Tips for Getting Started on Couponing<\/a><\/em>.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A sunk cost expense refers to the loss of time, money, or effort, which you can&#8217;t get back. It\u2019s one of the most basic economic concepts, and it can work for both consumer and commercial finance. If you let sunk costs influence your future decisions, even when it\u2019s not in your best interest, it may [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-629","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/julialipscomb.com\/index.php?rest_route=\/wp\/v2\/posts\/629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/julialipscomb.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/julialipscomb.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/julialipscomb.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/julialipscomb.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=629"}],"version-history":[{"count":2,"href":"https:\/\/julialipscomb.com\/index.php?rest_route=\/wp\/v2\/posts\/629\/revisions"}],"predecessor-version":[{"id":631,"href":"https:\/\/julialipscomb.com\/index.php?rest_route=\/wp\/v2\/posts\/629\/revisions\/631"}],"wp:attachment":[{"href":"https:\/\/julialipscomb.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/julialipscomb.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/julialipscomb.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}