Are you aware of the alternative cost of your life both professionally and privately?

Every choice we make in life has a consequence and everything has an alternative cost

By choosing one thing over another thing in life, even if we do not choose anything we pay an alternative cost for make a choice even if we want to hold on to status quo. In business we often talk about the financial cost of investing the money, time, or some other resource.

We have all heard the expression; “There is no such thing as a free lunch.”

Resources are scarce. Our resources in life are time, money, and mindshare, by making one choice, or not making a choice and maintaining things as they have a cost if we like it or not.

Life is all about values and priorities. We face trade-offs every hour in life.

Life requires of us to make choices among mutually exclusive alternatives. Every time we select something, we forfeit other alternatives and the concomitant benefits. The cost of something is what we are willing to give up to getting it or not getting it. This is what is our alternative cost. My experience in life so far is that most people both in business and in private are not aware that all choices we make have an alternative cost.

We can do anything but not everything. The million-dollar question is what we will sacrifice when choose One Option Over the Others?

When we are standing over multiple choices, the quality of any option cannot be assessed in isolation from its alternatives. The price we pay or the sacrifice we make, or the benefits we give up for doing what we’ve chosen to do instead of doing something else is our alternative cost. In sum, the alternative cost is the cost of passing up the opportunities that a different option would have afforded.

In business most costs are calculated in terms of money.

However, just because we don’t have to spend money to do something does not imply that the options we face are without any alternative costs. For example, if we sit for one to three hours every day watching TV or a series we like on our tablet, we have already paid the subscription for the streaming services, we don’t have to pay for every hour we also see. But there is an alternative cost there too. We could have used that time to do something else, we could have taken further education, visited a friend or read a book etc. I often meet people who want something more, they want more exciting tasks at work, they want a better career they want to be slimmer, have better health, they want to make more money, etc. But very few are willing to pay the price. But far too many are not aware that everything we do in life is about priorities, and everything has a cost whether we like it or not. Either it is that we choose something over something else, or that we do not choose anything at all. But this too is a choice, and thus this also gets an alternative cost for not doing anything.

The alternative costs apply to all our choices - big and small ones

Alternative costs apply to all our choices in life, even small things as deciding to wake up twenty minutes earlier in the mornings to leave home sooner to work and beat the horrendous rush traffic, there’s the alternative cost of twenty minutes of extra snoozing.

There’s even an alternative cost to even reading this LinkedIn article at this moment. You could have been watching your favourite TV shop or streaming service, taking a nap, calling up a friend, or moving on to another article in the time you’re devoting to reading this article.

Everything in life is about the alternative costs. Every time we say “yes” to a choice, we are also saying “no” to everything else we may have accomplished with our time, money, and resources.

If we learn to a greater extend to evaluate our life choices via the lens of the alternative cost our takes become clearer. End of the day, even decisions that appear to be no-brainers carry the hidden alternative costs of the options we will decline. Thinking about alternative costs may not change the decision we make, but it will give us a more rational assessment of the full implications of our decision.