Sunk Costs and Second Chances: What Economics Taught Me About Letting Go

You know that little voice in your head that says, “You’ve already come this far, you can’t back out now”?

Yeah. That voice has talked me into finishing shows I didn’t like, committing to a routines I’d outgrown, or staying in a situation that didn’t feel right because “I’ve already put so much into it”? But this week, during an economics crash course in the first few days of my Master’s in Supply Chain Management, I was reintroduced to a concept that made me look at that voice in a whole new way: the sunk cost.

In econ, a sunk cost is money, time, or effort that’s already spent and can’t be recovered. The rational thing to do? Ignore it when making future decisions. It’s gone. What matters now is what’s ahead, not what’s already behind. But in real life, we struggle with this.

We stick with college majors we hate because we’re already in year three. We stay in jobs that drain us because “we’ve worked so hard to get here.” We keep friendships or relationships that no longer feel full filling because “they’ve been in our life so long” We cling to routines, locations, even versions of ourselves that no longer fit, not because they’re still right, but because they once were.

That’s the sunk cost fallacy: letting the past dictate your future, even when it doesn’t serve you anymore. But what if we reframed those sunk costs not as wasted time or energy, but as lessons paid for? Life tuition. Wisdom earned. Because you can learn from the past without letting it hold you hostage.

Letting go of what no longer fits doesn’t erase the value it once had. It just means you’re brave enough to choose differently now. Maybe that means quitting a side hustle that no longer brings joy. Maybe it means walking away from a city, a career path, a person, or even a goal that doesn’t excite you anymore, even if it once did. Or maybe it’s as small as stopping a book halfway through and picking up something that truly lights you up.

Letting go isn’t giving up. It’s making space for something better. So if there’s something you’ve been holding onto just because of how much you've already given to it, pause and ask: Is this still serving me? Or am I just afraid to cut my losses? Because your future deserves decisions rooted in clarity, not guilt. And sometimes, the most freeing thing you can do is stop counting the cost, and start investing in the life you actually want to build from here.

Because when I heard the definition again of "Sunk Cost", my mind didn’t jump to factories or balance sheets. It jumped to life. In life, Sunk costs are about knowing when something has run its course, and having the courage to make space for something that aligns with who you are now. Because every "sunk cost" is a lesson learned for a stronger and better me and you :)