Should you keep going or cut losses on a failing financial commitment.

What Is the Sunk Cost Fallacy?

The sunk cost fallacy is the tendency to continue investing in something — a project, relationship, or purchase — simply because you've already invested resources, rather than because continued investment makes rational sense. Economists call this 'irrational escalation of commitment.'

How to Recognise It

Key signals include: continuing to use a service because you paid for it even though you don't enjoy it, holding a losing investment hoping to 'break even', or finishing a bad meal because you paid for it. This calculator quantifies the ongoing cost of sunk cost thinking.

Why It Is So Hard to Walk Away

There is something deeply human about not wanting to feel like you wasted money. Many people find that the bigger the original spend, the harder it becomes to change course. That feeling is real — but it is worth considering whether it is actually guiding you toward better decisions, or simply protecting your ego from discomfort. The money already spent is gone regardless of what you do next. The only question that matters now is whether continuing makes sense on its own terms.

The Hidden Cost of Carrying On

One thing people often overlook is the opportunity cost of staying the course. Every month you continue paying for something that no longer serves you is a month that money could be working differently. It can help to think of future spending as entirely separate from past spending. This calculator illustrates what those ongoing costs could look like over time, and what an alternative use of that money might represent.

A worked example

Try the defaults: amount already spent of 2,000, ongoing monthly cost of 100, months you plan to continue of 12, alternative use return rate of 7. The tool returns -1,116.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Amount Already Spent, Ongoing Monthly Cost, Months You Plan to Continue, and Alternative Use Return Rate. Frequency and unit price pull the total in different directions. The biggest surprise for most people is how small recurring amounts compound into large annual figures — that's where this calculation earns its keep.

The formula behind this

This calculator uses behavioral finance principles to illustrate the financial impact of spending patterns and psychological biases. Results are estimates based on the inputs provided and general assumptions. They are intended for educational purposes and do not constitute financial advice. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Reading the result without judgement

The figure isn't a scorecard. It's a prompt — something to sit with for a few days before deciding whether any habit needs changing. Reflexive reactions ("I need to cut everything") usually don't last; considered ones do.

What this doesn't capture

Behaviour-adjacent math is always an approximation. Human habits are lumpy and context-dependent; the figure here assumes steady behaviour which is a simplification. Treat the output as a prompt for thinking rather than a precise prediction.