In Praise of Quitting: Coming to terms with Sunk Costs

Sunk Costs: Something to avoid in a sailboat

Sunk Costs: Something to avoid in a sailboat

On the way into work this morning I listened to a great Freakanomics Podcast on the economics of quitting. The Upside of Quitting is a great listen if you are new to the Freakanomics team of Stephen Dubner and Steve Levitt.  They apply economics theory to a wide range of topics from hitchhiking to child rearing and make the application of The Dismal Science a compelling listen. Their book, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, is an entertaining primer on practical economics.

So how does being a quitter and economic theory have anything to do with our plans, cunning or otherwise? Well, at some level, Melissa and I are trying to figure out how to quit doing what we do and living how we live. How does one quit living in a traditional house, going to a traditional job, and living a traditional American life? There are costs, financial, social and emotional, associated with such decisions and I am still struggling with how this is going to look on the other side.

In the podcast Dubner enlarges on the economic idea of Sunk Costs. Sunk costs are expenses that have already been incurred and cannot be recovered. As we look around our home, I cannot help but consider what may well be considerable sunk costs for living as we have. The garage fills with more and more items that are destined to be sold at fractions of their original value or donated outright and it is liberating and crazy-making at the same time.

The trap of mourning sunk costs comes when we expend time or effort  to recover some of its value beyond an item’s worth. Anyone that has invested in a losing stock and held on to it as  a company spiraled into bankruptcy is familiar with the idea of the sunk cost fallacy. A purely rational evaluation of a the stock’s value and prospects should provide sufficient warning that the stock should be sold. But humans are seldom rational, and the sunk cost fallacy hinges on our optimistic valuation of the money or time we have already spent.

And so I look at furniture and other household goods being staged out in the garage and optimistically over-value its resale hoping to recover far more than I actually will. Likewise,  I continue with my current job at least in part because I have already put so much time in with this company and would hate to loose all that time and effort. These aren’t perfect examples of sunk costs but they serve to highlight our conflict.

Melissa has written about our furniture collection and the emotional process of letting go of items that she has worked so hard to restore. We both have put most of our adult lives into creating a space for ourselves and our children to grow and feel comfortable. Letting go of these sunk costs is not easy. Hard hearted economists like Steve Levitt might be able to jettison old furniture, but I hope Dr. Levitt will forgive us for lingering a bit over the loss even as we look forward to the the new possibilities our future life affords.

Imagine the Life You Want to Live

Preparing to Purge: The staging area.

As a psychotherapist I spend a lot of time asking my clients to imagine what their lives would be like if they made the changes they want to make. I ask them to imagine themselves living this new and improved version of the life they have.  I’ve spent much time myself imagining the kind of life I would like to live in the future; where I would go, what kind of boat it would be on, what it will be like swimming in warm water and living where the sun shines. Being warm.

None of this prepared me for reading the question in Peter Walsh’s book It’s All Too Much: An Easy Plan for Living a Richer Life with Less Stuff, the book I’ve chosen as my guide for the Great Purging.  He asks people to imagine their ‘ideal lives’. When I imagine my ideal life, the dreams always seem to include leaving my home and going somewhere else. And that probably tells you something about me. But that’s not what Peter is after. Peter wants people to imagine the ideal way of LIVING in their Current Home! WHAT THE F..?  I never once considered that question in terms of HOW I am living in the home I currently own. It was a jaw-dropping moment  when that hit me, I assure you. I had to have a long bath in order to recuperate.

No one has ever accused me of being organized. Creative, yes. Free-thinking, yes. Attention deficit disordered, yes. Organized? Definitely not. It isn’t that I don’t try. I have invented more systems for getting our stuff organized than I can count. But they never seem to last. And now, thanks to brilliant Peter, I know why.  It’s because I’ve always been focused on “the stuff”, as he says. This man, in one simple paradigm-shifting part of his book, (the Introduction, for those of you who are reading along) completely changed the way I think about clearing out all the stuff that clutters up our lives.

He wants me to imagine things like being able to find my keys, having decent work flow in the kitchen, and being able to sit down to a meal at a table without clearing it off first. He wants me to imagine flat surfaces that exist for their own sakes, a closet where clothes can breathe and I can find things I like and that fit me. He wants me to imagine living in my house free of the stress that comes from having to constantly negotiate the amount of clutter just laying around all the time, with no real place of belonging. It isn’t that I haven’t thought about and wanted those things. It’s just that I have not actually imagined what it would feel like, or how it would ‘look’ if life flowed that way at my house.

Peter wants me to imagine what it would be like if I had been able to move into this house with intention, being thoughtful about where things go and how things are done and then keeping those systems in place. This is the opposite of our move-in experience.

Eleven years ago we moved into this house on a holiday weekend. The house was a ‘fixer’. The only updates it had were done by the previous home-owner who apparently had no idea what the term ‘square corner’ meant. And it was filthy. I mean it. When my kids took showers the walls in the bathroom leaked nicotine from all the years of the previous owners’ smoking. It was just disgusting. It looked like the bathroom was haunted. Every wall in the house needed to be sanded, sealed, and repainted, including ceilings. We had to demolish the family room (one of those home-owner specials) and have it rebuilt. We had the master bathroom enlarged and the kitchen updated.  I’m pretty sure our kids hated us for at least the first 6 months as we all slept together on the floor of what would be the family room. It was the only room I could get reasonably clean.

During the remodeling years, (yes, plural) our things got shifted from one room to another. We lived in the house one way, and then lived in it another way, until the remodeling was finished. By that time we had collected more stuff and still had no system for living in the house. Kids grew up, went to college, came home, left again. These are the times when systems should be able to flex and change to accommodate new patterns of living. But if you don’t have anything solid to begin with, it’s pretty hard to get it to be flexible without the whole system falling apart. My attempts at organization were futile. Now I see that part of the problem is that I was always focused on “the stuff” and where to put it in the tiny closets. According to Peter, this will not cut the mustard.

According to Peter, if you focus on the kind of life you want to lead, getting rid of the stuff in your way makes more sense. So, accordingly, my wedding dress is now hanging in the garage with loads of other ‘stuff’ that is in the way of my living the life I imagine. The dress is in good company with stuff like the old sealskin coat from the 1930’s that I bought for 15$ when I was in highschool, two sets of china that are lovely but that I’ve used maybe twice in 10 years, and funky American pottery planters from the 1940’s that I used to collect and that now collect dust.
But what about the cool old Villeroy and Bosch majolica plate with a gnome on it? I love that thing and it’s so… me! I know it’s not on display right now, Peter, but surely you have a heart? In fact, he does. The gnome collection stays, in part. Only the ones dearest to me. And they will be packed away in the tiny house in the attic.Since we’ve now begun this Great Purging as the first step in our cunning little plan, I now understand that I must strike a balance between the vision I hold for living in our current home, and the one I hold for our future life on the boat, and into our next land based home, wherever that may be. As I go through cupboards, closets, and drawers, holding these visions before me, I ask about each one: Does this help me live the life I want to live in my home now?  Does this item belong in the life I will live in the future? If the answer to both of those questions is no, out it goes. Peter would be so proud.

He's living the life he wants to live.