Again I want to reference my Personal Finance textbook mentioned in my previous text."Have you ever noticed that you always give up something when you make choices?" That is opportunity cost. There is a cost in what we give up when we make choices. Therefore, our choices should be such that we get the most desirable result. The value of what we get from our choices should be greater than the value of what we give up.
In financial decisions, something is given up in order to receive a "more desirable" result. Some people might give up the use of 10% of their income now in order to have it set aside for retirement. Others may give up having money set aside for a big vacation in order to go out to eat on a regular basis.
Regardless of demographics everyone has a preference on how to use time and money. Opportunities are passed by in order to use our time and money the way we want. Hopefully we make the decisions that bring us the short and long term consequences we desire.
To finish the post I extend the following invitation from the textbook:
"Select your use of time [and money] to meet your needs, achieve your goals, and satisfy your personal values."
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