Have you ever found yourself doing what doesn’t feel right?
Imagine a scenario: it is Friday night, you are going to a watch a movie, and you decide to splash on premium seats, VIP package. As the movie starts, you realize it is awful. What are you going to do? Honestly? If we are not mindful, we will probably stay and watch it. In the back of mind, we will think we have paid for this ticket, so we need to get our money worth.
Even though if you think rationally whether to stay or go, money has already been spent – so we should leave and not suffer through it.
This what this video is about – a little flaw in our brain programming called Sunk Cost Fallacy, that could be affecting your personal finance and other areas of your life.
- The Sunk Cost Fallacy definition
- What are Sunk Cost and Fallacy?
- 3 examples of how Sunk Cost Fallacy affects your personal finance
- 3 steps to handle Sunk Cost Fallacy
If you understand behavioral psychology and can identify your biases, you can start building discipline with your finances.
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