But It’s Mine! Why We Can’t Let Go {Bias Day 8}
—Handling Our Loss Aversion

What is loss aversion?

Loss aversion is our preference for avoiding loss more than our preference for acquiring gain.

It hurts to lose something once it is ours. We’ll work harder to keep from losing it than we would to acquire it in the first place.

Here’s an example of loss aversion.

If someone gives you $15 as a birthday gift, you’re pleased. But it won’t compare to the grief you’ll feel if $15 flies out the window of your car.

If you own a $50 vase, you might refuse to sell it to someone offering $75. Yet if you saw the exact same vase in the store, you might not buy it for $25.

In general, once we own something, we become possessive. The ratio of pain from a loss is almost twice that of joy from a gain.

Why does this happen?

Our bias leans toward safety. When measured against each other, threats weigh heavier than opportunities.

“For an organism operating close to the edge of survival, the loss of a day’s food could cause death, whereas the gain of an extra day’s food would not necessarily cause an extra day of life.”

This old saying applies:

A bird in the hand is worth two in the bush.

We simply hate losing things we already own.  

Why is loss aversion bad for us?

Loss aversion causes us to cling too tightly to our things, our thoughts, our money, even when we need to release them. We fear losing what we have. And the more we have to lose, the more fear we have of losing it. Our attachments can make us feel vulnerable and anxious.

Loss aversion operates from a scarcity mindset. It perpetuates stinginess instead of generosity, not only with material things, but also with relationships and ideas. The longer we are in a relationship, for example, the harder it is to let go, even when it’s unhealthy.

We’re more comfortable with the bad we already have, versus the possible good we’re uncertain of. We are biased to believe this:

“Better the devil you know than the devil you don’t.” 

But it's mine Loss Aversion

How can we manage our loss aversion?

As with the other biases, become aware that loss aversion is a real thing. Notice when it’s being used against you, such as when a streaming service offers you a trial month for free, knowing that once you try the service, you won’t want to let go of it.

Also be willing to change your perspective about things you already have.

For example, when you’re cleaning out a closet, ask yourself if you would buy this blouse today if you saw it in the store. If not, get rid of it. Instead of viewing yourself as already owning it, change your viewpoint to that of a non-owner.

Another strategy to help deal with loss aversion is gratitude. Be content with what you have, when you have it. Hold things loosely, being grateful for time already spent instead of being anxious about a future loss. Develop an abundance mindset.

As Socrates said, “He is richest who is content with the least, for content is the wealth of nature.”

Also, remember to think long-term. The fear of an impending loss now can prevent you from making a wise decision for your future. Move past a short-term-only framework.

How did Jesus teach against loss aversion?

Jesus taught his followers to focus more on his spiritual kingdom than on our physical kingdoms. Material treasures hoarded here can be be destroyed and stolen. We will experience loss of these things. But spiritual treasures in his kingdom are safe (Matthew 6:19-21).

Jesus also taught that life is more than our possessions (Matthew 6:25). More than our reputation. More than our attachments. Being anxious about what we’ll wear or how we’ll look or how much we have will add no value to our life. Instead, seeking the kingdom of God and his righteousness will bring all things into alignment (Matthew 6:33).

Live with open hands instead of clinched fists. 

Loss aversion affects us all differently. Maybe you don’t cling to money, but you cling to your schedule, for example. Do you struggle letting go of things you no longer need to keep? Share in the comments.

You are on Day 8 of the series: “How to Uncover Hidden Biases.”

Uncover Hidden Biases

Previous: Scripture Wisdom {Bias Day 7}
“If You Don’t Know What You’re Doing”

Next: Halo Effect {Bias Day 9}
“Are Taller People More Successful?”

15 thoughts on “But It’s Mine! Why We Can’t Let Go {Bias Day 8}
—Handling Our Loss Aversion

  1. Sharon Hazel

    The challenge for me is more to do with ‘my plans’ and schedule than my possessions. I have found it hard to adapt quickly, or to be diverted, and to have my plans changed – so last years disruptions were a good learning experience to hold my plans loosely! Interesting post 🙂

  2. Pam Ecrement

    Fascinating theme and topic you have unpacked here, Lisa. One of the things that come to mind is that my husband and I are weekly going through little places here and there to sort through things and determine if we can get rid of them or pass them on to someone else. (After 56 years of marriage you discover you have saved a lot of little things and wonder why you did.) It is amazing to us that something we discover after years of not seeing or using an item still is debated on whether or not to keep it “just in case we ever need something like this again.”

  3. Laurie

    Wow! Your post really made me think this morning. I do tend to cling to things. Not money or possessions, necessarily, but ideas (and maybe even people!) I cling to the idea that I am right, long after it is time to admit I am wrong. I can think of other examples too numerous to mention! I loved this line: “Live with open hands instead of clinched fists. “

  4. Jodee Schrllau

    This got me thinking. I didn’t realize loss aversion was a thing. But I realized I have it. I believe my Mom may have taught it to me. She was raised during the depression and they were poor. Never throw anything out, you may need it later. I did well until I lost my steady income, now it is much harder to get rid of things I’m not using. Thanks for your insightful solutions.

  5. Martha Jane Orlando

    I think I began to ditch my loss aversion when the home I grew up in, my old high school, and my elementary school were all demolished. I literally could not go home again, and I had to accept it, for better or for worse. I don’t cling to possessions, though I’d be sad to lose some of them. Yet, I know it’s possible to live without them.
    Blessings, Lisa!

  6. Gayl

    “Live with open hands instead of clinched fists.” Amen! There is so much stuff in our house that we really don’t need. We need to change the mindset and just get rid of all the things that are not really needed. Blessings to you, Lisa!

  7. Anita Ojeda

    Oh, this one is soooo good. Ok, all of them have been good, but my closet is full of evidence of my loss aversion problem! I’m not a hoarder, but I do find it difficult to let things go. I love the hack of seeing things as a non-owner.

  8. Bev Rihtarchik

    Terrific post. It’s so hard to let go, but Jesus really modeled a life of simplicity – an absence of stuff we guard too closely. This line jumped out at me: “Hold things loosely, being grateful for time already spent instead of being anxious about a future loss.” I’ve been missing the presence of loved ones in my life, currently, and this was a needed reminder to be grateful for time already spent. Gratitude really is a miracle cure!
    Bev xx

  9. Alice Walters

    Dear Lisa, thank you, THANK YOU! Our extended family is going through the challenging transition of selling my mother-in-law’s house as she moves into a senior care facility. This gives me so much clarity and insight. The Lord knew exactly what I needed to hear this week.

    1. LisaNotes Post author

      Oh, I feel your pain, Alice. That’s a hard transition to make, but I imagine especially so during a time of pandemic. Praying for your wisdom as you deal with your m-i-l’s things as well as for your peace through the emotional hardship!

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