Have you ever been involved in a project or scheme that you sank money, time and effort into, only to discover it wasn’t working as you’d hoped it would?
How do you feel after you have put ‘life equity’ into a relationship that you realize is not going the way it should?
Instead of giving up and moving on to new prospects or undertakings, you continue to devote your energy, focus and funds to the doomed project, or person, or opportunity. Eventually you dig yourself into such a deep hole, you wonder if you could ever climb out.
There could be many reasons, like ego, self-esteem, or pride holding you back.
You go through life hearing and acquiring a ‘don’t give up’ attitude that makes it even more difficult to cut your losses and move on. More likely, in life, the culprit could be the devastating aversion to sunken resources and costs you invested that you can’t salvage or recover.
Often, when we find out our relationship is ending or the project is failing, we dwell on what we will lose by giving up and moving on. What we should be focusing on is the costs of not moving on.
What are the missed opportunities if you continue on the path of wasting more money, time and effort?
In a recent article (Promoting de-escalation of commitment: A regulatory focus perspective on sunk costs) for Psychological Science, Daniel Molden and Chin Ming Hui revealed a sure-fire solution to making better decisions when your deeds and projects are doomed or go off-center.
Psychologists term it “promotion focus.”
By adopting a focus on what you have to gain, rather than what you have to lose, it becomes more comfortable to accept the losses and allows you to make a healthier decision.
Molden and Hui instructed participants in their study to think about their goals in terms of potential gains. Those that dwelled on prevention, versus future advances, remained blocked by the spent losses.
If you find yourself in this type of situation, it’s a good idea to make a thoughtful determination to refocus yourself prior to making your final decision.
Consider what you have to gain by cutting your losses now and you are more apt to make the right choice.