Over the past couple of months I've been thinking more about how we spend our time in leisure pursuits, and how some things that we do – while fun – can end up being more of a drain on the bank account than we may have initially realized.
We all have things we enjoy doing as hobbies, and to one degree or another those hobbies often can end up being cash flow negative or positive activities.
One of my main hobbies over the past few years has been personal finance blogging. When I first started blogging was a creative outlet for me, and it was something I enjoyed doing on the side. Over time my blogs ended up becoming a cash flow positive activity, and I actually started to make money from my hobby.
Other hobbies and activities that we have at our house haven't been as positive for our budget's bottom line. If you're not careful your hobbies can quickly go from being a nice diversion, to a black hole for your paychecks.
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Hobbies Can Be Expensive
While it's good to have hobbies and things you enjoy doing, if you're not careful you can end up in a place where those hobbies are taking over your life and killing your budget.
My wife for a while had a hobby of scrapbooking. On the face of it you wouldn't think that hobby would be that expensive, but you'd be surprised at how many things you can buy for the hobby. First, we ended up buying a machine called the Cricut, which basically cuts out custom patterns in paper and card stock that you can use in your scrapbooks/cards/etc. It's a cool little machine, but it was almost $300 at the time. I think she's used the machine only a few times. Then there are other things you can buy including card stock, little themed kits to put together scrapbooks for certain occasions, and so much more. It can quickly become a very expensive hobby if you let it.
For me, one of my hobbies that has the potential to become expensive is mountain biking. While I've had the same bike for many years, and have saved money on that by buying quality – you could spend a ton of money if you wanted upgrading components on the bike, buying extreme sports cameras to record your rides and buying bicycling gear. Spending hundreds of dollars a year wouldn't be out of the realm of possibility.
My wife and I recently both took a class through a co-worker to get our permit to carry firearms since he was offering the class at 80% off. After taking the class and learning more about it, I realized that sport shooting and firearms are a very popular hobby that a lot of people spend hundreds of dollars on every year. We've been to the shooting range a couple of times now and quickly spent a couple of hundred bucks just on ammo and gun rentals at the range. It is fun though, and I can see how people can become addicted to the hobby. They say once you've bought one gun, you end up buying a bunch of them.
Start Tracking What You're Spending
So how do you engage in hobbies, without allowing the spending to get out of control?
For me the first thing that we did to help keep our spending in check both in our hobbies and in other areas was to actually track our spending. We use a software called You Need A Budget 4, where we enter everything we spend, and we can see at the end of the month or year how much we've been spending in certain categories. It can be eye opening to track and see just how much you are spending in certain categories.
You may want to consider taking things a step further once you've seen overspending on certain hobbies – to setup and follow a budget for that category.
Set A Budget On How Much You Can Spend
If you're overspending on a certain budget category, in our example here – on a hobby – it will pay to take the time and figure out just how much you can spend in that category every month or year.
For us we haven't set aside a budget for our hobby categories specifically, but my wife and I have created a “HIS” and “HERS” budget category that we can spend on whatever we want every month – including on our hobbies. So if our budget limit is set at $150 for the month, that's essentially all we can spend that month for our hobbies, for getting coffee, or whatever we desire. If we want something that costs more than that we have to save up the money over time from that category.
If you want to take it a step further you can even start doing an envelope budget where you're getting cash out every month, putting cash in your envelopes for all of your frequent spending categories, and then only spending what's in the envelopes, nothing more. It's a great way to stay on track with your budget.
So what hobbies do you have that have the potential to be very expensive? Have you kept the spending in check?