Free Real Estate Articles by Damian Lanfranchi and Done-For-You Deals

You’re about to get an Economics lesson that will change the way you manage your family finances (don’t worry, this isn’t boring college stuff).

You see in economics there’s a concept known as “sunk costs”. Real simply this just means any amount of money or time you’ve already invested that you can’t get back.

The point is when you make financial decisions, or any decisions for that matter, you can avoid poor decisions by treating “sunk costs” as exactly that – a lost expense you can never get back. Never weigh sunk costs in making a decision. After all, they’re already sunk!!

Okay – enough economics – let’s go to the movies!

What was the last bad movie you saw in the theater?

I’m talking really bad – just thoroughly un-enjoyable???

So halfway through – you know, the point where you realized, “This movie is just getting worse”, did you get up and walk out OR just sit there?

If you’re like most folks, you probably sat there.

Why?

Even though the movie was giving them a migraine, most folks will say, “Well, I already paid $8 so I stayed.”

That’s sunk costs in action!!

Stop and think about it. Does wasting more of your time watching another hour of an irritating movie make sense just because you already paid for it?

(Stay tuned for Part 2 of Family Finances – Sunk Costs & Bad Movies)

Related articles:

Family Finances – Sunk Costs & Bad Movies Part 2 of 2