Opportunity Costs

With COVID 19 making so many people have to contend with a reality that might be far from what they had expected at this point in their lives (when is that not the case), it’s a good time to start looking at the problem solving process again. I am a big NPR fan and one of their Podcasts (The Planet Money Podcast) gave me the inspiration for this post.

As some of you may remember, this past March my car quit on me as I was making a drive from to Tacoma, WA to Boise, ID. At that point, I had been considering giving up my car for a while and the thought process was rooted in an economic idea called opportunity costs.

Opportunity Costs – As defined by the Podcast, the value of the next best thing you are giving up

What does that mean exactly?

One very important point that the podcast pointed out is that economics is not merely about money. In my estimation/summation, economics is about the aggregate outcomes of the decisions that people make and the broad patterns that arise out of those decisions. Economics has a lot to do with human psychology, how we meet basic needs, and, how we pursue higher order cognitive needs like meaning/purpose. It’s much more than dollars and cents.

In the last 5-6 years I’ve come to learn that I am a huge fan of walk-ability in a neighborhood. I didn’t realize how important that was to me until I had it in Tacoma, WA. Growing up in Birmingham, AL and going to College in Houston, TX, I couldn’t get to the grocery store, work, and school, unless I had a car or rode the bus. Then, I assumed that was just the way life is. However, in Tacoma, WA I accidentally discovered that by using some defined parameters one can easily choose a neighborhood that’s walk-able.

I say ‘accidentally’ because, in Tacoma, my first apartment happened to be across the street from a grocery store. Originally, I chose the location for it’s proximity to the military base I was still serving at. The area was nice and the grocery store was a bonus. But it was in the Southern Part of Tacoma. As I transitioned out of the Army more of my social life and my working life was towards the North End of Tacoma. I eventually migrated there. Part of my decision making was reducing driving time so I could save money on gas. I liked where I was in South Tacoma but I was making very little money as a personal trainer so my first thought was to reduce costs. However, I also liked being close to a grocery store. The convenience is hard to beat. So now I was moving towards a place where my whole life was becoming much more easily accessed. I could walk or bike as opposed to drive. My car began to sit a lot more.

A car sitting on a street with plenty of tree cover is not burning gas but it’s getting crapped on by birds and it’s collecting green moss because the Northwest is moist year round. There was a time when I would regularly go and deep clean my car inside and out. This was a 3-4 hour affair. Mind you, my car was small. A 2002 two-door Honda Accord:

She was a beauty! RIP.

I couldn’t imagine if I had something much bigger. I began to realize that I was spending so much time cleaning the car deeply at regular intervals only for it to get dirty all over again and fairly quickly. Also, it was sitting a lot. Incrementally, how much more value was I getting out of spending all the extra time to clean the car thoroughly, over and above just removing gross dirt/debris? What could that extra time spent go towards? Also, there was the little money I spent on gas/insurance. The car was sitting a lot. Did I need to keep it at all?

Of course, there’s maintenance as well. Cars are always a liability. They may afford you the ability to get to a certain place but the car itself costs you money. An older car with lots of mileage is most definitely going to cost you money. You’re going to have to make repairs. What’s more challenging is when the repairs become unpredictable. You go outside to head to work or the grocery store and the car won’t start. You get it to the shop and it’s $1100 dollars to repair. Lots of people will say that’s too much money and blah blah blah but you gotta work and the alternative might be a car loan which I’m not a fan of. So I began to think, “Do I really need a car?” The lack of predictability was becoming a low grade constant source of anxiety. “When is it going to break? How much is it going to cost?”

Of course, the idea of getting a car loan becomes more palatable if I go ahead and get a job as a Police Officer. Being a Police Officer is something I’ve thought many times about doing. However, I know the job is incredibly stressful and I’ll have to start off on night shift. A car loan would more than likely be over 3 years at least. What if I am utterly miserable as a cop? What if I’m miserable 3 months in? Someone might suggest more patience but the issue isn’t patience. Sometimes we’re patient with the wrong things and sometimes we’re impatient with the wrong things. I could be impatient with getting a car loan and be forced to be patient (aka- miserable) being a Police Officer working graveyard shift. Or, I could be adaptable with my transportation situation and still have time to pursue writing/speaking, still be able to sleep at night like a normal person, and I could find work close to where I live (something I can walk to).

The opportunity costs associated with getting a car immediately are the loss of time to continue working on my business and the loss of energy due to working graveyard shift. The opportunity costs associated with not having a car is a limited range of travel, but as we have discussed, that can be mitigated by choosing to focus my neighborhood search on a place that’s walk-able.

Here in Little Rock, AR I have managed to do just that. I live within walking distance of my partner, a grocery store, and the Local Medical Center. I’ve found another job as a Hospital Security Officer working day-shift here in Little Rock. I’ve got plenty of time to keep pursuing my passion and I’m not on the hook for an auto loan.

It’s not a matter of patience it’s a matter of what’s important to you and what makes a good quality of life. The pandemic (whether a forced reset or simply a pause) has challenged many people to begin thinking a bit deeper about their lives and the reasoning behind their choices. What are you putting your time towards? Where is your energy invested? What’s important to you? There’s no right answer but there is the answer you have to decide is right for you. I also believe there is profound regret from not making the hard choices to do those things you have always wanted to do. However, for some of us, the costs of change are much greater than the costs of regret. Each one of us has to decide what we’re willing to live with.

What are some goals/dreams/passion projects that you would like to work on? What are some unique/challenging lifestyle choices you could make in order to free up time/energy/focus to begin work on those goals/dreams/passion projects?

-Travis

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

search previous next tag category expand menu location phone mail time cart zoom edit close