A few days ago, I came across these two new concepts and since then I have found myself being able to identify them in my everyday life and the gravity of them. First, I will define the terms with my understanding of them.
Opportunity Cost ~ If you are spending time on one thing, perhaps, responding to a couple of emails, this means you are not performing many other things such as studying, learning the piano and a million other tasks. The point I am trying to make is that we only have 24 hours in a day, and what we choose to do in those 24 hours is taking away other opportunities. Therefore, decide what you want to do each day wisely. This does not mean that before I begin a new task, I stop and ask myself if this is the most beneficial thing I could be doing because personally, that would be very exhausting. Instead, I am attempting to think more long term, as those decisions have the most impact. Because, watching 2 hours of my favourite TV show now instead of finishing of an important book may not seem very severe right now, but in the future, these little choices add up and shape who I become and what I learn.
Sunk Cost ~ Sunk cost is very similar to opportunity cost, hence, to best explain sunk cost, I will give you a scenario that depicts it very well. Imagine you have just completed your first year in university, and have 3 more years before you can receive your law degree. Problem is that you realise you hate your course and want to change your degree, however, because you have invested a year’s worth of time, effort and money, you think it is best to complete the degree even though you hate it. This is sunk cost; it has a strong influence over your next move.
Being aware of your opportunity costs and sunk costs can sometimes aid you in making decisions. A friend of mine recently confided in me about her worries in wanting to change her degree but being unable to make up her mind about whether it was the right course of action because of the immense sunk cost. Right then, I realised how powerful sunk cost was, as it was holding her back from choosing the path that was best for her mental and physical health.