When I took a year off, I left behind my undergraduate business degree (four years and $40,000), my master’s degree (two years and $30,000), my CPA license (one year, $3,000, and four super-hard tests), and my CFP certification (one year, $2,000, and another super-hard test).
Because of the time, effort, and money I had put into my education, I felt trapped. I was successful in my business and career, and it would be madness to leave the only profession I have ever mastered.
Then I realized those dollars are all sunk costs (money you can’t get back).
That money is gone, no matter what I do next, and I don’t owe it anything. The only choice remaining is whether or not I want to sink more time into this career as well.
Many of my clients think they have invested too much in the path they have chosen to shift now. This belief is called the sunk cost fallacy, where we continue a behavior because of a previous investment of time, money, or effort.
What sunk costs are you avoiding walking away from? Is your daily lack of happiness and fulfillment more expensive than those costs? Are you ready to take a break and do what you’ve been longing to do?
When you convince yourself that going in a different direction doesn’t make sense because you’ve “put too much into this,” it’s hard to conceive of how different (and awesome) life could be if you made a radical change. Thinking you are indebted to your efforts of the past will only keep you stuck and unhappy, sinking more time and costs into the fallacy.
I see this frequently with teachers that I speak with. The passion for molding young minds has faded over the years, and they are looking for a change. They feel stuck, however, because they need to stay a few more years to become vested in their pension.
Often, they have a Master’s degree in education, which increases their pay while they are teaching but doesn’t provide a ton of value in a different career. It’s normal to feel this way, but those are sunk costs that will never be recovered and shouldn’t influence your decision.
My expensive education, time-consuming professional licenses, and 10,000 hours of suffering to build a client base were all reasons not to pursue the change I desired in my life. That was the case until I realized these were sunk costs and should have no bearing on what I want for the future.
Just like we leave our questionable decisions in the past and chalk them up to lessons learned the hard way, we need to do the same with our money. Whatever you spent your money on in the past was for a different version of you.
Don’t beat yourself up, and don’t live with regret for what you could have done differently. Mostly, don’t let your past spending hold your future happiness hostage.