How To Let Go Of Clutter That "Cost Good Money"

If we feel like we're losing money, it can be much harder to let go of stuff we don't use.  But the truth is pretty simple: the item isn't the same as the money was - it's now just clutter. This episode focuses on what you need to know about those kinds of sunk costs and gives you a process to help you learn from them so you don't make the same mistakes again.

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Transcript

Hello and welcome. It's Kelly Jane McCann, professional organizer and clutter coach. And you are listening to decluttered by design a podcast where I provide practical guidance to help you declutter your life with ease. 

The question today is are you holding on to anything simply because you paid good money for it? Holding on to something you don't need, you don't use, or don't love, or even sticking with an activity you don't really enjoy, just because you spent money on it means one thing, you are getting caught up in a sunk cost. 

 
So what is a sunk cost? Well, a sunk cost is an economic principle that says, money that's been spent, is gone. That's pretty simple, right? It's gone as soon as you spend it, whether you use the item or not. So let's say you spent two hundred dollars on a tennis racket. But then you found out you didn't groove on tennis? 


What would you do? If you're reluctant to say goodbye to the racket because you spent good money on it, then all you're doing is anchoring yourself to the sunk cost. 


Where's the benefit to you? Here's a hint. Since you aren't using the racquet, you aren't benefiting. Holding on to something that represents a sunk cost may make you feel like you're somehow getting your money's worth. After all, you still own the item right? So you technically haven't lost anything. But chances are you won't be feeling great about it. 

  
Instead, the repeated encounters with the item will remind you that you spent the money and it's gone and regret and guilt will be the feelings you get served up. The bottom line is that you can't overcome a sunk cost by holding on to the associated item. Even if it feels that way, that technicality of you still own it, so you haven't lost it isn't actually true, the money is gone. 


So once you've determined that you're anchoring yourself to a sunk cost, I recommend you commit to letting go right then and there, that you either donate the item, or you sell it if it's something that's in hot demand. Now, here's the thing about selling, unless the item is incredibly popular, and in short supply, you just aren't going to get anywhere near what you paid for it. We live in a world of supply and demand. So unless people are demanding it, it's unlikely that you're going to find a buyer that's gonna pay you anywhere close to what you paid for it. And people really get caught up in this they want to recoup the cost but the truth is, it's not going to happen in most cases. 


So if you can accept that, it's going to be much easier to let go. And I also encourage people that when they're deciding between donating and selling something, you need to factor in the time and effort involved. Selling takes work, you have to list the item, you have to interact with the buyers. But that brings us to another economic principle. And that is opportunity cost. When you use your time and your effort to try and sell a sunk cost item. You don't have that time available for anything else, like the money it's gone. So you really need to decide, are you getting a return on your investment of time when you're trying to sell an item that may or may not get you anything close to what your time is actually worth? I can't answer that for you. That's something for you to answer. 

  
But as you release that item, give yourself permission to let go ofany anger, guilt, shame, or remorse that might go along with having bought something that you didn't use. Nothing good is going to come from holding on to those negative emotions. Instead, use that energy to learn from the experience. 

 
So how might you learn from a sunk cost experience? Well, I recommend doing a post mortem and try to identify what caused the sunk cost in the first place. Was it an impulse buy, were you maybe on vacation and there is the gift shop and you just decide to buy a memento without really thinking about it? Because that's what you're pre programmed to do. So you acted on impulse. Did you acquire it without consideration for need? If you're a recreational shopper, that's a very real possibility. Did you succumb to pressure from a salesperson or your family or friends? Did somebody suggest you you should have this? And you went and you bought it? 

  
Was it an aspirational purchase? So aspirational purchases are those items that we buy, because we think we should be some sort of person like, an example might be you buy a journal, because you think that you should be journaling, or you buy some fancy kitchen product because you have this idea that you should be a great chef. So those are aspirational purchases. 

  
Were you seeking status? Sometimes we buy stuff because they say to the world, hey, look at me, I've made it I can afford this item. And we don't factor in whether or not we actually will Want the item. So we just buy the items to show people that we've reached a certain level in life. If you can understand the reasons behind your sunk cost purchases, it will help you steer clear of similar mistakes in the future. 

  
That's why this step is so important. Going forward, you can reflect really carefully on new purchases, whether they're expensive or inexpensive. You can ask yourself, Is this really necessary? How will I use this? Where will this item live? I suggest to people that they consider instituting a waiting period policy of at least 24 hours before you buy a non critical purchase. This will give you time to think through the purchase and make a truly deliberate decision. And deliberate decisions feel better because well because they're delivered because we have thought on them. And we're spending our money in a way that makes sense. 

 
Now, why bother letting go of the sunk cost item at all? It's a real challenge, right? I don't deny that you have to, you have to do that work that sort of post mortem on it, you have to decide, are you going to sell it? Are you going to donate it? I've actually had people argue with me that holding on to a sunk cost item is smarter than letting it go. But the truth is, it isn't. When you move through this process of letting go and analyzing the purchase, you learn a lot. And if you apply what you learn, that's going to help you avoid repeating the same mistakes in the future, which means you get to keep more of your money. So it is a financially smart move when you take the long view on it. 

Now, I'd love to hear what you think of this idea. Have you run into sunk costs in your decluttering journey? How did you handle them? Are you sitting on any sunk cost right now? Do you have a tip for dealing with sunk costs? I would love to hear it. You can find me everywhere at Organizing Maven.