Choosing means giving something up — what is opportunity cost?

①The big idea in one sentence

If you choose something, you can't also choose the thing you didn't choose.

That sounds obvious. But once you start noticing it, you'll see it everywhere.

• You can have apple or banana with lunch — you pick apple. The "missed" banana is the opportunity cost.
• You can watch one TV show before bed. You pick A. Show B is the opportunity cost.
• You can spend Saturday morning at the park or playing video games. You pick the park. Video games is the opportunity cost.

The thing you didn't do is a cost — even if you didn't spend any money.

②Opportunity cost with money

This idea is most useful with money, because money is limited.

Imagine you have £5 of pocket money this week.

• You could buy a comic for £3 — opportunity cost: the £3 of other things you could have bought
• You could buy a magazine for £4.50 — opportunity cost: the £4.50 of other things
• You could save all £5 — opportunity cost: any treats this week

You can't do all three. Money picks one. Whichever you choose, you give up the others.

③A worked example: the cinema trip

Imagine you have £15 saved up.

Option A: spend it all on going to the cinema with a friend (ticket £8, popcorn £4, drink £3 = £15).

Option B: spend £8 on a cinema ticket only, skip the popcorn and drink, keep £7 for later.

Option C: don't go to the cinema this week. Save the £15. Use it next month for a bigger trip you're planning.

Each choice has an opportunity cost:

• Option A's opportunity cost: the £7 you would have had left in Option B
• Option B's opportunity cost: the popcorn and drink
• Option C's opportunity cost: missing this week's cinema with your friend

None of the options is "wrong". They're different. But noticing the opportunity cost helps you decide what really matters to you today.

④It's not just money — time is the same

You only have so many hours in a day. Every minute you spend on one thing is a minute you can't spend on something else.

This is why grown-ups say things like "time is money" — because the same idea applies. If you spend 2 hours playing one game, you're also choosing not to spend those 2 hours doing something else.

For 8-9 year-olds, here's a useful version of the idea. If you have 1 hour of free time today:

• You could play your favourite game — opportunity cost: time outside, reading, talking to family
• You could go for a walk — opportunity cost: game time, screen time
• You could practise something (music, sport, drawing) — opportunity cost: pure fun time

All three are fine. But you can't do all three at once. Whichever you pick, the others wait.

⑤A quick game to play

Try this with a sibling, friend or grown-up:

1. One person picks any item or activity
2. The other person has to name the opportunity cost
3. Swap and repeat

Examples:

• "I bought a £4 magazine." → "Opportunity cost: £4 of anything else, like a film rental or some sweets."
• "I watched TV for an hour." → "Opportunity cost: an hour outside, or an hour of homework done early."
• "Mum spent £30 on a new pillow." → "Opportunity cost: £30 toward our holiday saving, or 6 takeaway coffees."

This sounds silly but it's a real grown-up skill. The more you notice opportunity costs, the better you get at making choices that feel right later, not just right now.

NCFor teachers: curriculum links

• England — PSHE Association KS2 L17 (managing money), L19 (decisions)
• England — Maths KS2 (problem solving, comparing values)
• Wales — Curriculum for Wales Progression Step 2-3 (HWB AoLE)
• Scotland — Curriculum for Excellence MNU 2-09a, HWB 2-21a
• NI — PDMU KS2, Mathematics KS2

Full mapping in the curriculum map.