Faith and Accounting: What Sunk Costs Taught Me About Life

Never Turn Down Ice Cream

June 25th, 2014Posted by Brian

I’m a Communication major.  This, you would think, would keep me away from any business- or science-related classes.

I’m also pursuing a certificate in Actuarial Science and Mathematics.  For those who do not know what actuaries do, they calculate risk, often for insurance companies.

Anyway, one of the classes that I needed was an introduction to accounting course.  It took me a while to get in the class (the professor had to squeeze me in), but I made it.

It was a pretty enjoyable class.  It was a lot of adding and subtracting, which was a lot easier than the calculus-based statistics class I was also taking.  I learned quite a bit (most of which I don’t currently remember…such is college).

There is one lecture that was important to me.  How important?  Well, I’m writing a blog post about it, so we’ll just say ‘pretty darn important’.

It’s the idea of sunk costs.  These are costs that do not matter.

Your business spent $20,000 on a public service announcement about cup holders last year?  Spending that money last year should not influence whether you make another PSA.

Why?  You already spent the money on the first PSA.  You can’t wish it back into existence or get a refund.  If, in the present time, it makes sense to make another PSA, you should do it.  You can only move forward, not backward.

That last sentence is how sunk costs relate to life. 

We cannot spend our lives in sin because of what happened in the past.  Just because you were a liar in the past does not mean that you have to stay a liar (as an example).  You can insert many different sins there.  For me, it’s trusting myself instead of God.  Just because I trusted myself in the past does not mean that I have to live that way forever.  I can repent and turn from that sin. 

Trusting myself in the past happened.  It should not stop me from moving forward, though.

In the Bible, David went through the same thing.  He sinned against God quite often.  He disobeyed God (1 Chronicles 21) and had an affair (2 Samuel 11).  But, when he sinned, he repented.  He did not stay in those sins.

Maybe there are more ‘academic’ things I could have remembered from accounting.  Regardless, I think this lesson on repentance is pretty dang awesome.

Also, communication is better than accounting (go Comm department!).

Thanks to the incomparable James Kania for helping me figure out if my explanation of sunk costs made any sense…at all.

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