4 Ways To Overcome The Endowment Effect to Declutter Better
This post explores the endowment effect, what it is, and how it can cause clutter to build up. We’ll also learn four ways to combat the endowment effect to declutter better.
My Vintage Sweater Set
Let’s start with a quick story.
I have a sweater set hanging in my closet, which my mother wore when she was in high school. After high school, she held onto it. She gave it to me to wear when I was in high school. I wore it a few times. Then, it was my turn to save it. I hung it up in my closet.
Time and time again, it was packed into a moving box, and then unpacked and hung up in my closet. I didn’t wear it for many, many years.
When my daughter was in high school, I asked her if she would like to follow in the tradition and wear the sweater set, too. She did.
She wore it once then gave it back to me. I promptly hung it back up in my closet. It’s been hanging there for a while now. No one wears it. I can’t seem to toss it or give it away! It’s too valuable. It’s vintage!
What is The Endowment Effect?
What’s going on? One explanation is the endowment effect. According to behaviorecomics.com, it is a bias towards the objects we own as being more valuable than the objects we do not own, regardless of the market value.
We humans are hardwired for loss aversion, a survival mechanism that served our species throughout time when food, shelter, water, tools, and the like were difficult to obtain.
Because of this loss aversion, or a fear of losing what we have, we tend to place a higher value on things already in our possession. We feel anxiety when thinking about giving something away or throwing it out.
Sure, it makes sense if we purchased something and spent our good money on it. Sentimental items are regarded as highly valuable, even though they may not sell for much on eBay or Facebook Marketplace.
Researcher Richard Thaler, winner of the Nobel Memorial Prize in Economic Sciences, tested subjects by randomly handing out mugs.
He asked the half of the group who received mugs how much they would like to sell their mugs for. He asked the other half, who did not receive mugs, how much they would pay for one of the mugs.
The “sellers”, who received a mug free of charge, put the price somewhere in the range of $5 to $7 dollars. The “buyers”, those who did not receive a mug, reported they would purchase one for about $3.
Because the mugs were already in the possession of the “sellers”, they placed a higher value on them in comparison to the “buyers”.
Letting Go Is Hard to Do
Do you find it difficult to let go of items even though you are fully aware you no longer need or want them? You’re not alone. Many of us find it difficult, even painful, to let some items go. When this happens with too many of our things, clutter can easily build up.
I often help clients release items cluttering up their spaces. I regularly release items from my spaces, too. I can relate to friends and clients when they say how hard it can be to let go of things. I’ve felt that pang of loss when I was in declutter mode.
The strange thing is, I don’t actually want some of these things anymore.
I have held on to these items for so LONG!! In my head, I know this makes no sense. Sound familiar?
4 Ways to Overcome the Endowment Effect
The endowment effect could be a key reason, at least in part, you find it so hard to part with some of your things. It helps to explain how clutter is created and why it’s sometimes hard to get out from the rut of holding on to stuff you don’t want or need.
Here are a few strategies you can use to get rid of clutter.
- Become Aware – The first step to behavior change is awareness. Now you know one reason it might be hard to let go of something, you can be more conscious of your thoughts. Tell yourself it’s the endowment effect trying to grab a hold of you!
- Use Your Imagination – If you are having a particularly hard time making a decision on something you want to declutter, imagine it no longer belongs to you. This can weaken the ties you have to it.
- Hide Stuff From Yourself – Place items you are not sure about into a box and seal it up. Put a date three to six months from now on it and store it away. You may find you forgot what’s in the box by the time the date rolls around. If you haven’t needed to access the box by the expiration date, go ahead and donate it.
- Remember Your Why – If your resolve is low, it’s an excellent idea to write out the reasons you want less clutter. Have these reasons out where you can see them as you are going through your process. What gains are you going for?
An Ounce of Prevention
The strategies above can allow us to let go of clutter a little easier, and also remind us to be more present to what we decide to purchase in the first place.
I know we are all bombarded with messages to buy more and own more each and every day. Sometimes it’s hard to block all that out. Practice to make your purchases smarter for your life and your intention.
Thanks for reading my blog! Question time. What are some things you find hard to declutter because of your perceived value of them?