How Much Is Too Much to Spend on Your Hobbies?

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Thanks in part to the time I spent serving in the Army, I have tons of friends with unusual hobbies. Friends who skydive every weekend, with hundreds of jumps under their belts. Helicopter aviators who are learning how to fly airplanes. Endorphin junkies who register for triathlons and adventure races every chance they get.

On the more sedentary side, my parents collect wine and have a cellar full of bottles. And I've been taking guitar lessons for years. But there's a problem with all of these hobbies: the cost.

All the fun pastimes are expensive, or so it seems. Army officer and adventure racer Robert Kurtts agrees. "Adventure races and triathlons not only have entrance fees," he says, "they also have the cost to travel to the race and stay overnight before an early morning race start."

Those entrance fees can range from $20 for a short local race to more than $500 for a national or international class event. Beyond that, Kurtts notes, some races are gear-intensive, and all the necessary equipment can cost hundreds or thousands of dollars.

Kimberly Paine, aka Misfit Merida of the Providence Roller Derby team, says that her sport is putting unexpected pressure on her home life. "Gear, dues, insurance, after parties ... the expected and unexpected costs of playing roller derby have strained our wallets and our marriage," she says. "One pair of skates can cost between $300 and $600, and a set of wheels can cost over $100. The average roller derby player spends about $600 a year on her favorite pastime."

Hobbies like these can get quite costly, and that's not even taking into account the value of a person's time.

When Hobbies Become Unhealthy

Everyone needs a hobby, or even more than one, but you owe it to yourself to take a good look at what you actually spend on them every month. How much of your disposable income is going toward them?

Do you properly account for your hobbies every month in the family budget? Or do you intentionally leave it your spending vague. Have you ever hidden the true amount of money you spent on your hobbies from your spouse? These can be serious warning signs that you're spending too much on your diversions. You don't want to jeopardize your family's financial well-being and your retirement savings by overspending on your hobbies.

Rules of Thumb for Hobby Spending

Erin Conrad of CouponPal says that it's definitely common for people to underestimate how much they're spending on their hobbies. "For example, if you're a golfer, you might not add up course fees, new clubs, or meals at a restaurant when you go out," she says. But she's not an advocate of ultra-frugality, or cutting out the things you enjoy. She does, however, suggest you set some broad budget guidelines. "A good rule of thumb is the 50/30/20 formula. You spend 50 percent of your income on your essentials (bills, mortgage, etc.) and 20 percent goes into savings. That leaves you with 30 percent for 'wants' or fun stuff."

Other financial experts recommend a more restrictive approach: Another rule of thumb I've seen is to limit your spending in your budget on entertainment, hobbies included, to just 10 percent of your take-home pay.

You should take such suggestions with grain of salt, though. Studies have shown that we value experiences far more than material possessions. Hobbies can pay off in this respect.

"If you truly love your hobby, you'll be able to get creative about the ways that you pay for it," says newspaper columnist Cherie Lowe. "Start by seeing if you can actually get a job that helps finance your hobby. So, for example, [if your passion is golf,] see if a driving range or golf course is hiring. Many will offer green fees or special hours just for employees."

Can You Monetize Your Hobby?

One great way to justify an expensive hobby is to turn it into a side business.

"If you find your hobbies are starting to take out too much cash from your stash, consider turning one of them into something profitable," says J. Money, the popular author behind Rockstar Finance and several hobbies turned business ventures.

Do you enjoy writing? You could consider freelancing. Do you collect coins in your spare time? Perhaps you should consider selling them on sites like eBay, or setting up your own website.

"The hobbies you're most passionate about are usually the things you're the best at in life," says J. Money. "It just so happens those two qualities are some of the best traits for business. Who knows, maybe it'll turn into a nice little empire?"

Hobbies Could Springboard Your Life in Retirement

Or could you use your hobby as a launching platform for a job in retirement? Maybe it is not such a bad thing that your hobby costs you an arm and a leg. That's the advice Diane Eschenbach, a life coach, often gives her clients.

"Those materials and experimentation are all building the foundation for your true enjoyment and possible monetization of your passion in the future," Eschenbach says. "Building a side business is something that really benefits from being done over time and when your current income can support it, that scenario is a perfect testing ground."

Hobbies are a win-win situation because they make people happy, says Eschenbach. If you're spending everything you make on your hobby, then possibly take that queue and transition right away to your hobby.

Maybe Spending a Lot on Your Hobby Doesn't Matter

"There is no benchmark, but a good idea would be to funnel the majority of the miscellaneous spending you're already doing into your hobby, says Joshua Duvall, a fee-only financial planner with Capital Financial Services in Glenville, New York. "As long as you have positive cash flow every month and are on track to meet your goals, whatever they may be, I think hobby spending is an important part of life. What is money after all, if it's not a means for us to enjoy what we love?"

Do you have too many hobbies? Does it even matter if you spend too much on hobbies? Are they straining your family life and costing you too much? Have you ever thought about turning one of your hobbies into a business?

Hank Coleman is a financial planner and the publisher of the popular personal finance blog Money Q&A, where he answers readers' tough money questions. Follow him on Twitter @MoneyQandA.



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