Personal Development

Sunk Costs, Cognitive Dissonance, and Kicking Ass

If you don’t run a business you might not know the term “sunk cost.” A sunk cost is something you have to pay for up front, that you can’t just sell off later. Usually it’s something big. Adding a new wing to your building is a sunk cost. Licensing a new database is a sunk cost.

Ideally if you’re going to sink money into a major purchase, you make damned sure it’s going to do what you want. Everyone knows that. But sometimes it doesn’t work out.

If you just spent thousands of dollars on a new database and it doesn’t meet your needs, what do you do?

Photo credit: "Prayer is the language" by Leland Francisco

Cognitive Dissonance

Here’s what most people do. They decide it actually does meet their needs, even as it fails to do so.

The reason is cognitive dissonance. Cognitive dissonance is what happens when your real actions conflict with your hopes or beliefs.  It’s that feeling you get when you love your kid, but you just spanked your kid. You have to justify the disparity between your feelings and your actions, or else you feel a weird kind of tension.

That’s is the same tension you get if you sink a lot of money (or effort, time, etc.) into something that doesn’t actually work. It’s embarrassing. You feel stupid. Why did I do all this for nothing? Well, it’s not comfortable feeling stupid. You want to feel less stupid, and quick. One way to do that would be to choose a new solution and sink money (effort, time) into that instead. Go in a new direction, seek greener pastures.

But that’s hard.

The easy way out is to convince yourself it actually works fine, or at least it’s good enough. Typically you add to your beliefs to sell yourself on this. You tell yourself your kid deserved being spanked, and that the spanking will actually help him in the long term. Okay, now you can rest easy without changing anything.

Life is full of sunk costs. You spent money to get an education. You bought a house. You took on debt to finance things you wanted.

And now, no matter how much stress those things cause you, there’s no easy way to offload them.

So you start to tell yourself sweet nothings. “I love this house,” even if you don’t. “College was the best time of my life,” even if it wasn’t.

Photo credit: "Lonely Couch" by ~dgies

A Sedative for Glory

The problem with this kind of rationalization is, even though it makes you feel better in the moment, it’s self-perpetuating. Telling yourself you love your house means you’re going to dump even more money into it (and incur even more debt). Telling yourself college was the best time of your life means deciding you can’t make future years just as good or better.

Rationalizing the things you dumped money into is not a good strategy. It undermines your hopes and dreams. It’s taking everything you could potentially set out and accomplish, punching it in the face, and settling for whatever’s at hand.


I’m not saying you can just up and leave tomorrow. I know people have debts and responsibilities. But if something in your life isn’t working, the first step to fixing it is admitting it makes you unhappy. (If everything in your life is already peachy, congratulations, keep kicking ass.)

If you don’t admit it, you’ll end up convincing yourself it really does make you happy. And that leads to getting in even deeper. That’s how years and decades slip by and then you find yourself sad and regretful.

Don’t do that. Instead, change.

If you have a sunk cost holding you back, maybe you can’t get out of it tomorrow. Maybe it will take two months or a year of work to get out of it. But admit that’s what you need to do, start the work, and you’ll be amazed how quickly you can make a change. Every day spent charging toward your goals is a day full of energy, and that energy builds momentum quickly. One day you’re making minor changes in your spending and the next you’re doing the things you always wanted to do. You’re kicking ass.

Anybody out there making a change?

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6 thoughts on “Sunk Costs, Cognitive Dissonance, and Kicking Ass

  1. This piece is so dead on in all three of its observations. Among other things, I am a teacher. It is the privilege of teachers to help others gain new insight, knowledge and skills in a variety of human concerns. So often, I see teachers (and in fact have been one) who invest themselves in a certain way of teaching, into a certain image of “teacher” and “student”, and when it becomes clear to everyone that that way is not working out well for most students, begin to dig down and justify–or as you say–develop new beliefs that justify remaining exactly where they are. Kicking ass, for me, is going to work any given day of the way, and imagining how we shall do it today–ways that I’ve never tried before, or ways that I’ve tried that need some new twist–to help each kind of learner make progress. When that happens, it’s a marvelous place to be.

    BTW, I’ve shared you article on FB. Just too good not to! Much thanks, Drew.

  2. Niki Whiting says:

    I am considering leaving my phd program. Definitely a sunk cost. This post hits the nail on the head.

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