Opportunity Cost

What??  What does that title mean?  The first time I heard the phrase "opportunity cost" defined was about two years ago in a Financial Peace University lesson (sorry to my high school econ teacher...I'm sure he explained it back then, but it didn't stick).  According to The Library of Economics and Liberty, "When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource."


Hmmm...for the purpose of this blog, I like this explanation from NetMBA better:  "While the cost of a good or service often is thought of in monetary terms, the opportunity cost of a decision is based on what must be given up (the next best alternative) as a result of the decision.  Any decision that involves a choice between two or more options has an opportunity cost."


Did I lose you yet?  Hang in there with me!  Opportunity cost is one of the most critical concepts in economics ~ outside of economics, it's an often over-looked component when costs are considered.  Now...let me bring that into my OrdinaryLife...


As it relates to a Weight Watcher, there are 6 PointsPlus is 9 Hershey's Kisses.  For those same 6 PointsPlus, a Weight Watcher can opt for 4 ounces of grilled chicken, a medium-size sweet potato with cinnamon, a serving of green beans and a side of sliced watermelon.  Choosing the Kisses over the full meal reveals the opportunity cost of the decision made.  You can have one or the other (or even a smaller combination of the two), but you can't have both choices for the same amount of PointsPlus, i.e., calories/fat/carbs/protein/fiber (don't jump on me WW folks, I know we don't use calories anymore).


So...what is it that I'm weighing as my own personal opportunity cost?  Recently, it has been the cost/benefit of exercising regularly.  As my family (and some friends close enough to see me in action every day) know, I'm a little bit "structured" in my daily schedule.  I've often joked that I live my life in 15-minute increments...that's not much of a joke!  The benefits of regular exercise are many...I don't need to tell you that...we're bombarded with it daily in the media.  

For me personally, these are some of the benefits, not necessarily in order of importance other than the first one:
1.  My back feels great.  I've had one back surgery and have another 4 or 5 bulging discs.  To say I've had no back pain in the months since I've been regularly exercising is HUGE!  The weight loss has also contributed to this, but I really believe the exercise has been key...both to the weight loss and the lack of pain.
2.  The endorphins have finally kicked in...literally, I can't wait to walk in the mornings.  I think I've even managed to astonish my husband with this one!
3.  Setting/meeting/exceeding goals...to be able to push myself to accomplish something physical is a real high.  I'm getting stronger, have more endurance and a better attitude about being able to do more.
4.  Ok...this one is kind of gross...I love the sweating part of it!  What can I say?  I know that when I've worked up a good sweat, my weekly weigh-in will be more successful!
5.  I can eat more!  Ha...who knew!  I've earned those extra activity points, and you can bet I'm going to eat them!  
6.  Cute exercise shoes/clothes.  Ok...that's pretty shallow, but gosh, have you seen all the options out there?  


So...what's the cost?  Well, obviously, if you walk in your own neighborhood, no actual money outlay (except for good shoes...definitely invest in those).  If you join a gym, you can expect to pay the monthly membership fee.  If you join a program for weight loss (and if  you are going to join a program, have I mentioned I love/endorse/highly approve of Weight Watchers?!), there's also a cost associated with that.  

What about the non-monetary costs?  You have to wrap your brain around the fact that in order to see the benefits, YOU have to make the choice.  You also have to know that if you're going to exercise, you've got to be willing to give up an extra hour of TV or sleep or facebooking or reading or...you fill in the blank...a few times a week.  That was probably the hardest thing for me to do...(harder even than walking into the gym the very first day into a water aerobics class...in a swimsuit...in front of other people)...I had to give up some time that I was spending on other things ~ that was hard...remember how I said I live my life in 15-minute increments?  That meant I had to find another hour in my day, several times a week...and that just wasn't easy to do.  And it won't be for you either ~ 'cause, let's face it, our time is very precious.  That's the opportunity cost for me - time vs. all the benefits I listed.  And for me, it's worth it.  

Just keep thinking of the benefits down the road, some of them you already know and some will surprise you ~ and keep marching down that road.  "The opportunity cost of a decision is based on what must be given up as a result of the decision."