4.2 Every Choice Costs You Something - Are You Paying the Right Price? - Opportunity Cost
If you play video games for an hour, you’re also giving up something else - sleep, practice, time with friends or that one YouTube deep dive to learn something new. Let’s talk opportunity cost!
You have 24 hours in a day and (sadly) you can't clone yourself. So whenever you decide to do something—like binge a show for 3 hours—you're also deciding not to do something else with that time (like study, play basketball, or sleep). That "something else" you gave up is what economists call an opportunity cost. It's a fancy way of saying when you choose one thing, you also choose to lose the opportunity to do a different thing.
What is Opportunity Cost?
Opportunity cost is the value of the best alternative you didn't choose. Every time you make a choice, there's a hidden cost: the other thing you could have done or bought. We often don't think about it, but it's always there. It's not about actual money spent, but the benefit you miss out on from the road not taken.
In plain terms: "If I do X, I can't do Y." The cost of doing X is losing out on Y (if Y is what you'd have done otherwise).
Real-Life Opportunity Cost Examples
Time (Entertainment vs. Study): You decide to spend two hours scrolling through TikTok or playing Minecraft. Fun, sure! The opportunity cost might be two hours of study or two hours of sleep you gave up. Maybe that was fine (everyone needs to chill), but it's good to realize the trade-off. Those same two hours could have been used to prep for tomorrow's quiz or practice guitar. Whenever you say "I don't have time for X," remember, you did have time—you just used it for Y. For example, "I didn't have time to practice piano because I spent an hour texting." That hour texting was the opportunity cost of practicing piano.
Money (This or That): Suppose you have $50 saved from your birthday. You can buy that new video game you've been wanting. If you do, the opportunity cost might be that you can't go to the concert next month with your friends (because you won't have the money). Or vice versa: you choose the concert, and the cost is not getting the game. Money is limited (especially as a teen!), so every purchase means there's something else you can't buy. Being aware of opportunity costs can make you think twice: "Do I want this game more than I want a night out with friends? Which one will I value more?"
School and Activities: If you fill your schedule with five extracurriculars, the opportunity cost might be chill time or the ability to really excel at one thing. If you take an AP class, the opportunity cost could be an easier elective that might have been more relaxing or fun (or vice versa—taking the easy class costs you the chance to challenge yourself). Even at lunch: choosing to sit with one group might mean missing conversation with another group of friends. We can't be in two places at once!
Sleep vs. Anything: This one's huge for teens. Say you stay up until 1 AM watching a movie. The opportunity cost is losing 2-3 hours of sleep. That might cost you concentration or mood the next day. Alternatively, if you always go to bed early, the opportunity cost might be missing some late-night gaming with friends. There's always a trade.
The idea isn't to stress over every little decision, but to be mindful. Realize that time and resources are limited, so choose what matters most to you.
Challenge: Think Before You Choose
Let's build the habit of recognizing opportunity costs. Your challenge:
For one day, before you make a decision (big or small), pause for 10 seconds and think: "If I do this, what am I saying 'no' to?" It could be as simple as "If I watch another episode, I'm saying no to going to bed on time."
At the end of the day, write down one or two interesting trade-offs you noticed. Maybe you realized "Playing basketball for an hour meant I didn't practice piano," or "Working an extra shift on Saturday meant missing a hangout."
Reflect on it: Are you happy with your choices? If not, what might you do differently next time?