Hobbies don't have to make a major dent in your wallet
Having fun while maintaining your financial goals for the future: it's one of life's great challenges.
Whether you're into photography, fishing or rebuilding classic cars, having a hobby has real benefits, like helping us reduce stress and burn off energy at the end of a long workday.Footnote 1
But finding that balance between enjoying life's many pleasures and maintaining a sensible budget can be difficult, particularly if your budget is tight. Thankfully, there are ways to have your cake and eat it, too – it requires being creative and disciplined with your spending, while maintaining a clear focus on your financial future.
Don't commit right away
Let's face it, we've all tried hobbies that just didn't stick, whether it's joining the company softball team, deep-sea fishing or playing the guitar.
That's why it's a good idea to try a hobby before committing to it and spending money on equipment, training or travel. For example, try renting or borrowing a guitar before buying one. That way, you can see if it's something you'll want to do for a long time without leaving you stuck with a bunch of expensive stuff you don’t use. And, if you find the hobby isn't for you, you haven't spent a big chunk of your savings on it.
Monetize your hobbies
It may be possible to turn your favorite pastime into something that can generate income and help you avoid over-spending. For example, if you're determined to expand your growing guitar collection, consider providing lessons in your free time. Or, if you're an avid photographer, you could generate revenue by doing photo shoots for your friends and family.
Keep it to gifts
When you've got lots of pressing expenses – from home or car repairs to clothes for the kids – it can be difficult to justify spending money on hobbies. That's why it may be a good idea to limit your hobby spending as much as possible while hinting to friends and family that you’d love to receive hobby-related gifts for your birthday or the holiday season.
That sounds a bit selfish, but it could be quite helpful ‒ after all, many adults struggle to find the right gifts for other adults, even members of their own family. The key is to keep the hint-dropping from becoming obnoxious and to manage your expectations (i.e., don’t expect your Aunt Shelly to buy you a brand-new gaming laptop).
Make paying for necessities automatic
One way to manage your hobby spending is to pay for your necessities automatically. This may not help with all your important expenditures, such as buying groceries, but it can work for just about anything else, from rent and car payments to life insurance and investments.
For this to work best, try scheduling your automatic payments for the same day that you get paid. Once the necessities are paid for, you’ll have a clearer idea of how much you can spend on sports equipment, art supplies and the like. This will help you keep track of your finances and should make it easier to avoid going overboard with hobby expenditures. At the same time, it will help you set money aside for retirement or future purchases, from buying a home to a new car.
When it comes to enjoying hobbies on a budget, there are ways to have your cake and eat it, too.Opens a new website in a new window
Get professional advice
Even the most budget-conscious person in the world can use the help of a financial security advisor. And when it comes to spending money on the things you love, such as your favourite hobby, it's important to hear the advice of someone who can act as an impartial arbiter – in essence, someone who won’t be won over by a limited-time sale on the next great thing.
A financial security advisor can help you create a clear and sensible financial security plan. This plan should include a realistic breakdown of your spending on hobbies as well as the necessities, including rent, mortgage payments, groceries, automotive insurance, utilities, etc. Try to make your plan as detailed as possible, meaning you take even small purchases, like buying a coffee in the morning, into account.
And that's not all: your financial security plan should also account for your future goals, from going back to school to opening a business or retiring on the lake. Put simply, it's one thing to manage your hobby spending while focusing on your current financial situation; it's quite another thing to manage that budget while looking to the future.
Overall, a financial security advisor with Freedom 55 Financial can help you evaluate your hobby spending and show you how to stay on track to reach your financial goals.
1Jaime L. Kurtz, “Six Reasons to Get a Hobby,Opens a new website in a new window” Psychology Today, Sept. 15, 2015.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.