Sunk costs

Imagine you are playing with blocks and you accidentally break one of the blocks. You might feel really sad because you spent a lot of time and effort building the tower and don't want to see it fall apart.

This feeling of sadness is called a sunk cost. A sunk cost is when you have already spent time or money on something, and you cannot get it back.

Sometimes, grown-ups make decisions based on sunk costs. For instance, they might keep a car even though it is really old and needs a lot of repairs because they already spent a lot of money fixing it up. Or, a business might keep a factory open even though it is not making much money because they already invested money into building the factory.

But just because you've already spent money or time on something doesn't mean you have to stick with it. Sometimes it's better to cut your losses and move on to something else. Like if you were playing with blocks and they weren't fitting right, you might need to take them apart and start over. That way you could make a better and sturdier tower in the end.

Overall, sunk costs are like a reminder that just because you spent a lot of time or money on something, doesn't mean you have to keep doing it if it's not working or if there's a better way to achieve your goal.