the cost of using resources for a
certain purpose, measured by the
benefit given up by not using them
in their best alternative
- opportunity cost
I might be studying economics, again, this semester, but it is my 15 year old that is learning a little about scarcity and choice.
Lesson one, there are unattainable combinations. His, our, resources are finite which means choices have to be made - priorities first. Shallaway is going to the United Kingdom this summer, his school is offering a ski trip to Marble and he wants a pole for his go-pro.
We are committed to the choir but he is on his own for ski trip and the go-pro pole. He has a few hundred dollars left from Christmas but the combined cost of the trip and the pole exceed his savings by a couple of hundred dollars. He has a few choices - increase his revenue to meet his expenditures or make a choice. I am not being mean, it is only a few hundred dollars but he needs to learn about making choices and the cost of using his own resources.
Last evening he was out on the hustings canvassing for snow shovelling/ blowing opportunities. I respect the initiative, let's see how close he gets to his target.
It is easy to shoot for the moon when someone else is picking up the tab. I hope he never discovers credit.
Speaking of opportunity costs, the cost of raising a child has hit astonishing new heights. Statistics Canada, says parents of young children now carry debt worth 180 per cent of their after-tax income! That astonishes me - but cutting back to one vehicle and insuring we are not house poor has helped a lot.
The Fraser Institute has pegged the cost of raising a child at $3,000 to $4,000 a year — or $72,000 to age18. That does not take into account housing, childcare, sports, extracurriculars, braces or saving for University's.
Raising three boys means lots of scrimping and saving. Our short-term emergency fund and any additional long-term retirement savings are the price we pay for the all-consuming cost of raising a family.
Yea, I guess that new zoom lens and computer are on hold for a while and stucco ceilings are not going anywhere soon.
* I'll add links to sources when I get to my desktop computer.
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