Opportunity Cost is one of the first economic principles that I learned in the university. As a freshman majoring in Business Economics, I felt smart understanding The Law of Diminishing Returns, Opportunity Cost, and ceteris paribus all within the first week of school. Interestingly, these are the only concepts I remember from my college degree after choosing to pursue preschool teaching as a profession.
In the university I learned that opportunity cost is not always a numeric value. It is the value of the foregone activity that is lost because you chose to do something else instead: the opportunity cost of an action is the highest valued alternative to that action.
For me, the opportunity cost of exercising 1,000 calories away working out in the gym is watching TV in my jammies. On some days, lounging around the house has a higher value than going to the gym, and on those days, I stay home! The goal is to obviously engage in the activity that you value the most, and they can differ from day to day.
Summer just started and as a teacher, I am off from work. I can choose to work for extra pay if I wanted to. But should I?
The question I ask then is: What is the opportunity cost of teaching in the summer for extra pay?
The highest valued alternative to my working is engaging in fun projects (without interruption) with my children —going to the library, baking and cooking, gardening, walking to the park with friends, visiting museums, hiking, etc.
I would not earn extra money but by the end of the summer, I would have spent quality time with my growing kids. I could even take on some DIY projects that I otherwise would not have time for during the school year. After a quick consideration, it was a no-brainer.
For this summer, I simply value spending time with my children more. The opportunity of spending time with my children is priceless. Of course, I would have to cut back on spending and other unnecessary expenses, but I think in the end, it would be all worth it!