Why do some of us have a hard time getting rid of things we no longer need? Take a look in your closet, basement, attic, or garage. How much of what you see hasn’t been used in a while and is just taking up space? For some, purging unneeded items comes easily. But for others it can be a struggle. Why is that?
One reason for the difficulty is due to what’s known as the “endowment effect”*—a phenomenon seen in various studies, in which we tend to place a relatively higher value on things we already own. For instance, I will think my own things deserve a higher price than what I would be willing to pay someone else for the very same items.
So when we go to get rid of some of our stuff, the fact that we already have ownership of it is going to make it more challenging to look at it objectively. Not only do we think it’s more valuable than it actually might be, but we’re also faced with the fact we’ve already invested money into it. And since most of us don’t want to waste money—and getting rid of it feels like we’re wasting the money we’ve spent—we’re tempted to hang on to it.
One way to cut through the endowment effect, and to get to the real issue—is this something I should actually hang on to—is to simply answer the question, “If I didn’t already own it, how much would I be willing to spend to go out and get it?” This answer will shed great light on what we should probably do.
If we see a disconnect between what we would actually spend on it if we didn’t already own it (if anything at all), and our desire to hold on to it, it’s likely that our existing ownership is affecting our perspective.
Ultimately, if we don’t need it, don’t use it, and wouldn’t go out of way to get it, that’s a pretty good signal that it’s ok to let it go.
_* Greg McKeown discusses the endowment effect in ch. 12 of his book, Essentialism: The Disciplined Pursuit of Less._