I suffer from “sunk-cost fallacy“. The term is used in economics and business to refer to a cost that has already been incurred and cannot be recovered*. For example, an investor bought a stock in a company for $100 a share. Subsequently, the company starts failing. The stock drops in price…$80 down to $70 down to $30 etc.. The investor holds onto the stock because s/he doesn’t want to lose more money (see loss aversion), regardless of the fact that the company is doing poorly.
How does this relate to de-cluttering efforts? Like many people, I’ve held onto clothing and shoes that no longer fit, are not my style, have sentimental value (gift), wore once, etc.. simply because I attached a certain price to these items. Rationally, the money is already spent and if I don’t like the item, I should get rid of it. I could even sell it to recoup some of the cost. Instead I hold onto the clothing item because of sunk-cost fallacy.**
This weekend, I finally managed to really clear out my closet. For some items, I threw them in a donation bag and waited a few days to see if I would change my mind. Finally, I managed to donate these.
*Disclaimer: I’m not an economist.
** Again, I’m not an economist.
I spent way too much on kids clothing. I don’t need a shopping ban for myself. I need to rein in my spending on the kids! I now have 2 bins in the closet for “extra” clothing — i.e. clothes that fit them but are redundant. How many rugby polo shirts can a kid wear in one lifetime?
De-cluttering can save money. Now that things are grouped together and I can easily assess what I/we actually own, I feel like I will make much better spending decisions. Oh, I should give kudos to this book review post that helped me let go of more stuff.
Re-organizing can cost money. Even though i focused on de-cluttering, I did buy some storage and shelving to better organize some closets. I can also understand the allure of the Container Store! My Cost breakdown (so far):
- $30.45 for plastic storage carts
- $13.07 for hamper (RETURNED)
- $35.50 for stackable cubes (RETURNED)
- $25.00 for clothes to replace clothes I dumped (!)
I’m proud that I was able to re-purposed items to use as a charging station, book ends and miscellaneous storage.
All in all, I’m happy, probably way too happy, that I took the time to de-clutter and re-organize. The garage is another story for another day….