A cost that has already been paid and cannot be recovered.
Sunk costs have no influence on future outcomes
Imagine that you recently purchased a $100, non-refundable & non-transferrable ticket to see your favorite band.
The day of the concert you come down with a high fever and you are debating whether or not you should go.
You end up deciding to go because you don’t want to “let your money go to waste” and in doing so you fall for the sunk cost fallacy.
When making decisions, remove sunk costs from the equation
Your $100 is gone no matter what you do. Instead of dwelling about the money spent, try considering what you can do to make the best of your situation. Sometimes the best decision is to “cut your losses” and move on.